What Is a Sales Funnel? (And How to Use It)

What Is a Sales Funnel? (And How to Use It)

While some customers will find a product on your e-shop and buy immediately, others will think about their purchase longer and look for other options. Still others are just thinking about buying and are mapping out their terrain to have more insight in the future. Ideally, you're trying to engage everyone so that they buy from you.

The metaphor of the funnel is used in sales to describe this process. Just as you use a funnel to pour liquid into a container so that not a drop goes to waste, in a sales funnel you are trying not to lose a single potential customer.

What is a sales funnel and why use it

A sales funnel is a visual representation of a sales process. It precisely defines the different phases and allows the salesperson to see where the customer (lead) is at the moment. It tells the salesperson how to engage the customer in that part of the process and the next steps to take to turn the lead into a real customer.

Why is a sales funnel important? You should use it because:

  • helps you choose the right strategy to reach and convince customers at each stage of the sales process,
  • help you identify at which stage you are losing customers and why,
  • and avoid wasting money and energy on convincing customers who don't want to buy yet,
  • enables you to predict future business by better understanding the results of your marketing activities.

Sales funnel parts

In order for a customer to move smoothly through the sales funnel, you need to know where they are and what you can do to help them move on. While at the beginning he's looking more for information, then you can convince him of the benefits of your product and finally make it easier for him to make the actual purchase.

A sales funnel can have several parts depending on how you have your sales process set up. Generally, however, it always contains the following three parts:

  • Top of funnel (TOFU) - awareness - new leads that are looking for solutions but not yet ready to become customers and buy - marketers need to reach out to the lead and evaluate whether it represents relevant business,
  • Middle of funnel (MOFU) - consideration - potential customers who are already interested in your offering and are considering buying - marketers go to sales meetings with them,
  • Bottom of funnel (BOFU) - buying - customers who are determined to buy - at this point, merchants sign contracts with customers and start working with them.

Not everyone will pass through your sales funnel. How to identify suitable leads using lead scoring is described in the article.

How to prepare a sales funnel

To create a working sales funnel, focus on the following points:

  • Get to know your customers and their interests, needs and problems,
  • understand their journey through the sales process, how they behave, what channels they use, when they make decisions and when they need guidance to the next step,
  • determine the number of stages of the funnel you need to take the customer through before they buy,
  • think about effective tactics for each part so you know what content to offer the customer and how to get them to take the next step,
  • test and optimize all the steps, see what works and what needs to be tweaked to help the customer easily slip through to purchase,
  • use a CRM to help you keep track of the stages of the sales process.

Also remember that the creation of a sales funnel should be preceded by the creation of a business strategy. We write more about it in this article.

An example of a sales funnel

1. First contact: landing page

Potential customers can reach the top of the funnel through a page that they are led to by paid ads or social networks. On the landing page, provide basic information about your product or service and its key benefits. However, the most important element of the landing must be the form, because the next step is…

2. Get contact in exchange for useful content

On the landing page, customers typically download an e-book, checklist, sign up for a webinar, download a demo version of your program, or sign up for an email series. This will give you the contact details of a relevant prospect who has shown interest in your content. At that moment it becomes a lead.

3. Stay focused

You have your prospect's name, contact, and business, now you need to make sure they stay aware of you. A classic way is, for example, an e-mail series with useful content that you send to the lead to the specified e-mail. It does not contain any commercial offers, only tutorials, practical advice or other added value. You monitor what content he interacts with and what interests him. For example, if he regularly reads your emails or likes your posts, you have a better chance of succeeding with him and going to the next stage.

4. Encouragement to purchase

The lead is slowly moving into the lower parts of the funnel, so it's time to get them to buy. Offer him a free consultation, a discount or perhaps an extended demo version. In other words, anything that motivates the lead to make a decision.

5. Celebrate success or keep trying

If the lead buys, then cheers. If not, don't hang your head. The important thing is that you leave a good impression. Continue to make him aware of your brand and try to get him to buy again maybe in a few months. For most businesses, the lead has to get to the decision-making stage on its own – that is, to a situation where it will need your products and services. And if you were naturally in touch with him and left a good impression, he will remember you.

An overview of the deals you are currently working on and the stages your leads are in will help you maintain sales funnel analysis in CRM. You will find out if it is suitable for your business when you try it for free for 30 days.