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.

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.

Keeping track of the deals you're working on and the stages your leads are in will help you maintain sales funnel analysis in RAYNET's CRM.