You often hear the word Sales Funnel in the field of inbound marketing. You can compare this to a funnel for new customers with which you oversee your entire marketing and sales process. It is wide above and narrow below.
Unqualified prospects enter from the top of the sales funnel. These are all people who may benefit from your service or product, but with whom you have not yet had contact and of whom you are not sure whether they fit into your target group.
At the very bottom of the sales funnel, new customers come out. They have gone through the entire marketing or sales process.
The funnel metaphor is used because prospects fall off every step of the way. For example, there will be people who are only curious about your conditions, people who want to see what the competition is doing or people who are not yet completely convinced of your product or service.
Why should you use the Sales Funnel?
By using the sales funnel and quantifying your prospects in numbers, you can perfectly see at every step what works and what percentage actually converts into a customer.
With this data, you can change the entire process a little bit at a time in order to increase your percentage of customers. This also gives you the opportunity to tackle certain problems (that you didn’t know before) and to give you the information on which stage in the process the salespeople should focus.
The different phases of a Sales Funnel :
This is where the prospect finds out that your product or service exists.
This is where the prospect’s interest is aroused and he starts doing some more research himself.
Now your prospect will compare your product or service with the possible competition.
The prospect decides to choose your product and now the negotiations start.
The prospect buys your product or service.
After he gets to know your product/service, he compares his experience with his expectations.
If he is satisfied, he will make another purchase from you.
An example of the Sales Funnel at Groupon:
- Traffic comes in through advertisements, direct marketing, referrals, affiliates etc…
- People end up on the homepage of the website where they have to leave their email address and personal information.
- You will see personal offers.
- You will arrive at the purchase form.
- You buy.
- You will be informed weekly about new offers to convince you to make a purchase again.
This is a reasonable “standard” way that you can do a lot more with. For example, on your own website, you could still work with tripwires, upsells, downsells, cross-selling, all-in-one packages, and much more…
What exactly is the sales funnel?
The sales funnel shows how many people come in from the top of the funnel as prospects and how many eventually convert into customers. These numbers are measurable and editable. This gives you a good view of where problems arise, but also what your salespeople should focus on for maximum results.