A sales funnel is a marketing term that refers to the process companies lead customers through when purchasing products.
While most small business owners have a series a steps to move prospects through the buying process, a sales funnel brings a formal approach that defines the various phases of a client cycle. It also helps you nail down the various marketing materials you need to keep things moving.
Phases of the sales process
Depending on the sales model you follow there can be a multitude of steps, but most include the following four phases:
- Awareness – The point that a prospects learns about your business, products or services.
- Interest / Evaluation – The time in which a prospect is actively looking for a solution for a problem, and evaluating providers.
- Decision – The point at which a prospect decides they want to engage your company.
- Action / Purchase – The point when a sales is made and a prospect turns into a customer.
While there are times each process has distinct steps that stretch over a long period of time, there are also times that the lines blur. For instance:
- A prospect is actively searching for a solution to a problem and learns about your business through a referral or internet search. In this case the prospect already has an interest in the service you offer so the Awareness and Evaluation phases happen together.
- You meet a contact at a networking event (awareness) who is interested in what you do, but doesn’t have an active need for your service. It may take weeks or months before they are ready to move onto evaluation, so your job is to remain visible until they need you.
- You run an ad on Facebook and a person makes an impulse buy, going from awareness to purchase in a matter of minutes.
No doubt you can come up with other examples of how a prospect moves through the sales cycle. Because each buyer’s journey is a bit different, sales funnels are designed to cater to different needs and help you deliver the information a prospect needs to move them toward a sale.
Why a funnel?
The concept of the sales funnel has become popular because you lose people through each step of the sales cycle, thus you need to cast a wide net to start.
Think about all the networking events you attend. You likely walk away with 20+ business cards, and maybe one person will be a valuable lead. You’ve just gone from 20 prospects in the awareness stage, to one who has interest.
As the sales cycles continues, people will continue to drop off. For some people you won’t have the right mix of services. Others will make a decision based on price.
There are endless reasons why a prospect can walk away, and believe it or not that’s okay. One of the main functions of a sales funnel is to help you sort out the strong prospects from the weak ones so you know who to concentrate your time on.
How do I use sales funnels?
Sales funnels can be used a variety of ways, including sales reps staying in front of the prospect, or using automated tools beginning with a lead magnate on your website followed by a series of automated emails.
If automation sounds like the way to go, read on to learn exactly how to set up a drip campaign.