Sales funnel – how does it help in business?

Sales funnel – what is it?

It consists of several stages, with the first one being aimed at a very wide group of recipients, which is gradually narrowed down. At the final stage, customers who are keenly interested in your offer remain. Graphically, this model resembles a kitchen funnel, hence its name.

The funnel can be created for the B2B model – these are activities aimed at acquiring customers in the form of other companies or B2C – customers are individuals.

Sales funnel – benefits to your business

Are you wondering how a sales funnel could help you? There are those who claim that a well-thought-out and developed marketing funnel is a guarantee of sales success. And it is hard to deny this, because this strategy allows you to:

• get to know your target group well,
• analyze which activities are effective, what can be improved, and what is worth giving up.

Knowing the target group is the right foundation. After all, you need to know who your product/service reaches. What are this person’s problems, dreams, goals, desires, what they face every day and what bothers them. Thanks to this, you can determine how what you offer helps your customer and what benefits they gain from it.

This knowledge will also help you choose the communication method and appropriate marketing activities and verify their effectiveness. So how do you do it? The easiest way is through trial and error.

Based on your knowledge of your target group, you can introduce appropriate activities, e.g. you establish cooperation with influencers, organize an advertising campaign on TV or offer the possibility of testing a sample of your products for free.

Then you check the acquired leads, analyze whether these activities increase your brand recognition, brought greater trust or an increase in the number of customers.

Sales funnel – how does it work?

The goal of a sales funnel is to acquire as many leads, or customers, in the process, and as a result – increase sales. The first level of the funnel is very wide, because it reaches a large group of recipients. In fact, it is an element that sometimes attracts random people. It is mainly based on catchy advertising or online activity.

Fewer customers move on to the next stage – those who have aroused interest in your brand/service/product remain. This is one of the most important stages, which determines whether the customer withdraws or goes a step further.

At the next stage, it narrows down again and so on until the last phase – purchase. After this, the loyalty phase is often referred to – its goal is to maintain the relationship with the customer. So let’s move on to the stages of the sales funnel.

Sales funnel – stages

There are 4 main phases in the sales funnel, gradually narrowing down the group of customers. Stage 5, on the other hand, is extremely important in building a relationship with the customer – it increases the likelihood that they will patronize you again.

Gaining attention

This is the first stage, aimed at a wide audience. Here, the emphasis is primarily on advertising and building an image on the web. You can do this with an appropriate website, company blog, Instagram account, etc. These activities are intended to build your brand recognition, attract attention and encourage people to familiarize themselves with your product/service.

Gaining interest

This stage narrows the audience a bit more. People who are somehow interested in what they saw on your blog, for example, remain here. They want to ‘explore the terrain’, they are curious about what else you or your product have to offer. This is a very important moment, where establishing interaction with a potential customer plays a key role. What does it mean?

Interaction occurs, for example, when the prospect signs up for your newsletter, downloads a free e-book or mini-course, asks a question in a chat with a consultant, etc. This means that they show some greater interest in the product/service.

Note! This is not yet the moment when the customer decides to make a purchase. You will lose more people here, and the group will narrow down again and move on to the next stage, which is…

Desire

If the customer is already in phase 3 (Desire), it means that they are very much considering the purchase. They still have some hesitations and concerns, but they are close to making a transaction. This is the moment when you cannot lose them, although it will happen that some customers will also drop out of this stage. Then this is a good field for you to analyze – what is it that does not work at this stage that makes someone withdraw from the purchase?

At this stage, it is worth dispelling any doubts that may arise. Graphically and succinctly outline the customer’s problem and the way in which your product/service solves these difficulties. Show something that will encourage a purchase.

Action

Stage 4 is the finalization of the transaction, i.e. the stage when the prospect decides to  click ‘Buy’, ‘Order’, ‘Purchase’ etc. At this stage, they’ve decided to patronize you. However, you cannot leave the customer to their own devices, which is why stage 5 is crucial. With its help, you will build a more lasting relationship with your customers.

Loyalty

If you want the customer to be loyal, i.e. to come back to you for another product/service, you have to take care of them somehow, show interest – build a relationship.

How to do it?

It all depends on your target group and what could strengthen your relationship with them the most. It could be a discount code for subsequent purchases, a bonus, a personalized thank-you card, etc.

However, nothing will help if you exaggerate the advantages of your product and disappoint the customer with it. Therefore, when promoting your offers, focus on real and actual benefits.

Types of leads

Gaining leads, or customers, is one of the main assumptions of a sales funnel. Due to the actions taken and the interest your product generates, leads are referred to as:

• hot leads– these are customers who are very interested and almost decided to make a purchase, they just need an additional incentive, a clear call to action (CTA), etc.
• warm leads – these are people who have your product in mind, although they are still hesitant, unsure, perhaps also considering buying from a competitor. You need to subtly remind them of your offer and show its most important advantages.
• cold leads – these are all those customers who do not want to make a purchase at the moment, but show possible interest in the future. Here, for example, the opinions of other people, reliable data (e.g. from research) or an individual approach can work in swaying them to your side.