Funnel Building
A sales funnel is a marketing term used to capture and describe the journey that potential customers go through, from prospecting to purchase. A sales funnel consists of several steps, the actual number of which varies with each company’s sales model.
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Awareness
At the very top of the sales funnel is the awareness stage that is populated by the largest number of people. These people, not quite ready to be prospects yet, have just had their first interactions with your company and its offerings. They don’t know much about your brand at this stage, but are aware that it exists.
Evaluation
Armed with knowledge gathered during the interest stage, your prospects will double down on their efforts to know your company and offerings better. They may reach out to your customer service team with specific questions, or fill out a form to access more information. Remember, by this stage they may have already compared your offerings to those of your competitors. So, it is important to clearly answer their questions and help them understand how your offerings can solve their problems or needs.
Sale
We’ve reached the bottom third of the sales funnel—the prospect and seller have negotiated the terms of the sale to their mutual satisfaction, and the prospect pays the seller to officially become a buyer.
Interest
The first interactions will hook some of these newly-aware people and draw them slightly deeper into the funnel. With their interest piqued, these people will spend some time getting to know more about your company and your offerings. They might browse your website or catalogue, read your blogs, or peruse reviews from past customers.
Negotiation and decision
The prospect has now almost decided to purchase your product or service. Depending on the nature of your offerings, they might begin a negotiation over the price, terms of purchase, or both. But it’s fair to assume that they have a purchase intention at this stage.
Renewal or repurchase
The sale stage is not the end of the sales funnel. Soon a time will come when the sales contract is up for renewal. The customer must now decide if they want to continue with the same seller. If so, there might be a fresh round of negotiations over price and purchase terms, followed by a renewal or repurchase.
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Do sales funnels really work?
If you take away the marketing jargon for a moment, you realise that a sales funnel is nothing more than an exercise in paying attention to your customer and their journey towards making a purchase. Since the customer is king, paying attention to them can only work in your favour. Moreover, by helping you optimise the use of your marketing resources, a sales funnel helps stretch your marketing dollar.
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