A sales funnel, also called a buying funnel, is the visual representation of the customer’s journey, representing the sales process from awareness to action.
Funnel, which is sometimes called a marketing funnel or revenue funnel, illustrates the idea that every sale starts with a large number of potential customers and ends with a much smaller number of people actually making a purchase.
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How the sales funnel works
The stages of the sales funnel will vary depending on the company, but are generally divided into four sections.
- awareness: This stage includes the largest number of customer prospects. It is at this stage that customers have determined a problem, started looking for a solution and become aware of an organization through content marketing, an email campaign, social media marketing or other means.
- Interest: At this stage, the number of customer prospects begins to decline, but the possibility of a sales conversion increases. This is generally when the client will engage with the organization, ask for more information, and ask questions.
- Decision: Once the client has become acquainted with the organization, has made contact and sought answers to questions, it is time to make the decision. This stage of the process may include sales offers and additional research on the various options presented by the organization.
- Action: All the steps mentioned above fall into the final step: action. At this point, the customer decided to buy the product.
Sales funnel values
Companies use different values to analyze and point out opportunities and prospects throughout the sales cycle to evaluate the success of sales teams.
Examples of revenue lead management include quantifying the value of each funnel sales opportunity, determining the optimal flow rate – the average length of time at each stage of the funnel – and assessing the average closing rate of the transaction. (also known as the rate of return).
Sales funnel strategies
In today’s customer age, a customer’s journey – sometimes called the customer’s life cycle – is less likely to be linear. For this reason, some experts claim that the traditional sales funnel is outdated.
Others argue that the sales funnel is still a valuable tool, as long as the marketing and sales teams understand two things – that qualified sales opportunities can get into the funnel closer to the bottom than it was 10 years ago, and that the role of marketing is changing.
In the past, lead generation (the top, and widest, of the funnel) was usually the responsibility of marketing departments, while sales were responsible for feeding customers and guiding prospects through the sales pipeline.
Today, a successful company relies on both sales and marketing to guide the customer through the sales funnel and build customer loyalty, leveraging content marketing, customer data analysis and the two-way communication that social media marketing provides. .