Sales Funnel: How it Works, Definition, Stages, and Importance

Sales funnel also known as a revenue funnel or sales process refers to the buying process that companies lead customers through when purchasing products. The definition also refers to the process through which a company finds, qualifies, and sells its products to buyers. Keep reading for more details.

In the digital marketing industry, the sales funnel is one of the core concepts which can take your business from the unknown to a multi-million-dollar marketing machine.

If you want to take your business from zero to hero in no time, you must learn what a sales funnel is and how it works.

Did you know some marketers have built a career around implementing this single marketing concept?

Simultaneously, many entrepreneurs, coaches, influencers, and even marketers find it hard to wrap their heads around this concept.

So, we decided to develop a comprehensive blog post, explaining the sales funnel, its importance, and how it works. We also added ways you can create and optimize your marketing funnel to make the maximum impact for your business.

Why Is Sales Funnel Important?

A sales funnel helps you understand what potential customers are thinking and doing at each stage of the purchasing journey.

These insights allow you to invest in the right marketing activities and channels, create the most relevant messaging during each stage, and turn more prospects into paying customers.

From the moment prospects hear about your product or service until the moment they make a purchase (or don’t), they pass through different stages of your sales funnel.

That journey through your funnel may change from one prospect to another, but in the end, they’ll evaluate it based on their interest level.

They’ll think about the problem they’re trying to solve and conduct competitive research to make sure your offering is the best solution.

Before you start building your sales funnel, it is essential to have a clear business vision, develop an e-commerce marketing strategy, and then define your target audience to work towards your business growth.

If, for example, you are looking at how to create an online clothing store, you need to follow specific steps to develop your business and stay successful.

Stages/Phases of a Sales Funnel

The typical sales funnel is divided into multiple steps, which differ depending on the particular sales model. One of the most common ways of dividing a sales funnel possesses seven phases including:

Stage 1: Discovery/Awareness Phase.

Stage 2: Interest Phase.

Stage 3: Decision Phase.

Stage 4: Action Phase.

Each funnel pushes qualified leads into the next stage and removes those that aren’t a good fit for your products or services. Let’s discuss the stages of a sales funnel to understand how sales funnel works:

Stage 1: Discovery/Awareness Phase

In the awareness stage, your ideal customer may realize they are going through a problem.

But they’re still struggling to identify their challenge. This person could have many questions about their problem and how your business can solve it. At this point, they need to seek resources that could educate them about the problem.

This is where having additional content will come in handy. You want to have content about your products or services that your potential client can find on the web or on social media.

If you’re a life coach, your prospects at this stage might be asking this question: what is the purpose and direction of my life?

Or, if you sell mattresses, your prospects at the awareness stage might be asking: why do I wake up with lower back pain?

So, at the top of the funnel, your audience needs information so they can articulate their problems and ask the right questions.

Your job at this point should be to create content that educates them on their challenges or problems. That’s the way you convert untouched prospects into leads and move them one step down the funnel.

Stage 2: Interest Phase

At this stage, your prospects understand their problem and know something about your business, but they want to learn more.

However, they’re not yet ready to buy or sign up for your products. They’re still looking for possible solutions.

People usually take into account all available solutions to solve their problems.

For example, they’re sure that they need to do something to fix their back pains, but they’re not quite sure whether or not your mattresses are the right product to buy.

In other words, they’re looking for types of solutions rather than evaluating solution providers.

This is where you need content that tells how your mattress can help them get rid of back pain and why they should buy them.

Stage 3: Decision Phase

This is where your potential clients are ready to buy. They might be considering you as well as your competitors. Now your potential customers are at the bottom of the funnel knowing everything about their problem and potential solutions.

And, most importantly, they’re ready to select the business to buy the solution. Their questions at this stage are vendor-driven. This is when you should be making your best offers.

Small factors like free shipping, a bonus product, or a discount can set your offers apart from your competitors.

Whatever you offer, make it so attractive that your website visitors or audience will rush to become your customers.

Stage 4: Action Phase

At the very bottom of the sales funnel, people take action. They buy your products or services and you finally convert a cold lead into a customer through a well-defined process. At this stage, you should be thinking about turning one purchase into five or ten.

If they decide not to do business with you, your efforts can still produce results. Create nurture campaigns to stay top of mind.

Also, make sure to create some remarketing audiences and lookalike audiences to get back in front of your ideal customers one last time.

You can further engage with your customers and encourage them to leave feedback. You can have another stage in your sales funnel that deals with customer retention.

Your story doesn’t end once someone buys your products. A customer can be turned into a repeat customer and brand advocate.

To keep your customers happy, you have to help them thoroughly with all aspects of their problem.

Do you have questions about the subject? Don’t hesitate to reach out and ask us. Kindly share and subscribe to our content.

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Emmanuel June 3, 2021 0 Comments

Sales Funnel Optimization Strategies and Tips to Employ

Sales Funnel Optimization is the process of fine-tuning a sales funnel and its stages for the highest acquisition, conversion, and retention of prospective customers. To optimize a sales funnel, strategies and tips need to be employed. Keep reading to know more.

Before you start building your sales funnel, it is essential to have a clear business vision, develop an e-commerce marketing strategy, and then define your target audience to work towards your business growth.

This is where understanding the intricacies of a sales funnel comes in. Such intricacies include;

  • Upselling
  • Downselling
  • Tripwire Marketing
  • Paid Media ads
  • Sales page
  • Retargeting
  • Email marketing, and various other tips strategies one can employ. Let’s glance at some of these.

Upselling

Basically, a Sales Funnel Optimization technique where a seller invites the customer to purchase more expensive items, upgrades, or other add-ons to generate more revenue.

While it usually involves marketing more profitable services or products, it can be simply exposing the customer to other options that were perhaps not considered.

Upselling is focused on upgrading or enhancing the product the customer is already buying.

For example, a housekeeping service might upsell a customer buying a weekly cleaning package by offering a package with more rooms, and cross-sell by also offering a carpet deep cleaning service.

Downselling

A downsell is the reverse of what is happening in an upsell, rather than selling a higher-priced product, you offer a similar lower-priced product.

These lower-priced products also help to increase the average order of the customer and bring more profit into the business.

Downselling is a sales technique where you offer an alternative to the primary upsell by offering a more budget-friendly or more convenient buying option to your customers after they must have rejected or declined the upsell.

To some, seeing a reduction in price or a slight change of offer to suit the atmosphere causes a negative impression about a brand or doubt in the authenticity of a product.

While that could be true in some cases.

It’s your call as a business owner to study your audience and present the right downsells to people you think aren’t fit at the moment for your core offer.

Tripwire Marketing

Tripwire marketing is the Sales Funnel Optimization practice of offering leads a low-cost product with the intention of selling them more expensive products later. Tripwire marketing is a common practice intended to increase first customer acquisition.

The term tripwire marketing might sound a little shady like you’re trying to get one over on your customer. That’s not the case at all.

Marketing and advertising experts have been using tripwire marketing for decades in one form or another, and it works just as well online as it does in brick-and-mortar stores. In fact, it’s even more effective because you can more easily stay in touch with the customer.

Let’s say you run a subscription service for which you charge $30 per month. Customer A has been a loyal subscriber for six months, then suddenly cancels his membership.

That’s a tripwire.

You can then use email marketing to reel in Customer A. Reach out via email to ask what went wrong or if you can improve your subscription service in any way.

Then you offer a can’t-miss deal, such as one month for $5 instead of the standard $30 — with the option to cancel at any time, of course.

Paid Media Advertising

Paid media is defined as the purchase of ad inventory on a media channel or publisher site to broadcast your brand message and reach your target audiences. It is a form of digital advertising that includes sponsored content to promote a brand’s products or services.

It is all about paid promotions on other sites to display your marketing message and influence audiences you could never reach before. This can be done on social media, websites, blogs, publications, etc.

An essential component of a digital strategy for brand awareness and revenue growth is media. Media acts as the channel and real estate that carries the brand message and promotes the brand or the brand message.

Sales Page

Not to be confused with a business website or blog, a sales page is a standalone page created with one specific purpose in mind, to secure sales for your product.

The product or service you’re selling on your page can differ depending on your industry or niche. However, the purpose of your sales page remains constant – getting visitors to convert into customers.

A sales page is a great opportunity to explain your products and services to visitors and make them want to buy. It needs to be attention-grabbing, informative, and persuasive, all at the same time.

And if it’s not optimized for conversions, you’re losing money. That means any marketing and advertising budget you’re spending to promote your products will be wasted.

Retargeting

Also known as remarketing, is a form of online advertising that can help you keep your brand in front of bounced traffic after they leave your website.

For most websites, only 2% of web traffic converts on the first visit. Retargeting is a tool designed to help companies reach 98% of users who don’t convert right away.

Retargeting is a cookie-based technology that uses simple Javascript code to anonymously ‘follow’ your audience all over the Web.

Here’s how it works: you place a small, unobtrusive piece of code on your website (this code is sometimes referred to as a pixel).

The code, or pixel, is unnoticeable to your site visitors and won’t affect your site’s performance. Every time a new visitor comes to your site, the code drops an anonymous browser cookie.

Later, when your cookied visitors browse the Web, the cookie will let your retargeting provider know when to serve ads, ensuring that your ads are served only to people who have previously visited your site.

Retargeting is a powerful branding and conversion optimization tool, but it works best if it’s part of a larger digital strategy.

Email Marketing

Email marketing is the act of sending a commercial message, typically to a group of people, using email. In its broadest sense, every email sent to a potential or current customer could be considered email marketing.

It involves using email to send advertisements, request business, or solicit sales or donations. We have created a concise article on email marketing. You should read it here.

Sales Funnel optimization is the process of fine-tuning a sales funnel and its stages for the highest acquisition, conversion, and retention of prospective customers.

While no sales funnel is perfect, there’s nothing to say that you can’t influence the purchase decision of potential buyers and improve your sales funnel conversion rate. Sales funnel optimization works best if it’s part of a larger digital strategy.

We hope this was useful to You. Do you have questions about the subject? Don’t hesitate to reach out and ask us. Kindly share and subscribe to our content.

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Emmanuel June 3, 2021 0 Comments