A sales funnel is an invaluable concept to understand. Getting acquainted with it and learning how to use it can lead to a noticeable increase in leads and sales. According to statistics from Salesforce, 68% of companies have not tried to identify their sales funnel so this article will put you ahead of the competition.
At a very basic level, a sales funnel is the steps a consumer takes between being aware a product exists and purchasing it.
The reason why this is such an important part of growing a business is that not all of the people who enter the top of the funnel will reach the bottom. In real terms, this means not everyone made aware of your brand or product will purchase an item.
However, the more aware you are as a company about where people tend to give up on a purchase, the easier it will be to fix these problems and maximize the number of interested customers buying your product.
In the context of a sales funnel, the process of fixing these weaknesses is known as “plugging holes” in the sales funnel.
It is important to note that sales funnels are not an exact science.
There are plenty of examples that are different from the ones I will be exploring today, however, this article will give you an overview of how sales funnels work in general so that you’re better equipped to find out which sales funnel structure best suits you and your business.
Before the internet existed, these sales funnels were rather straightforward. At a very basic level, buying an item is broken into You see a shop (step 1) you walk in (step 2) you see an item you like (step 3) you buy the item (step 4).
This linear structure is not the way the majority of small and medium-sized businesses operate today.
The advent of the internet and social media has meant that businesses’ first step on the funnel can come from a multitude of different places, including social media, affiliate marketing, google ads and much more.
An example of a more complex sales funnel fit for the 21st century would be “Hellofresh.”
This is a company that sends out meal kits which you can then cook for yourself. They have many different ways to reach an audience with the first step of their funnel, from digital paid advertising to influencer marketing.
So, for example, let’s say Hello Fresh just sponsored a video of one of your favorite YouTubers and you watched the video – step 1.
You then decide to go to the Hellofresh website in the description – step 2.
From there, you press the highlighted button saying “view our boxes” – step 3.
You then design your box for your preferences – step 4.
You then register your email – step 5.
Give your address – step 6.
And check out – step 7.
In just seven steps, Hellofresh has moved from possibly not being known to having a new customer. This doesn’t come effortlessly, unfortunately. I’m almost certain that a group of very intelligent people spent a long time perfecting that sales funnel strategy.
The reason why this sales funnel is so successful is because it minimizes the obstacles a customer has to deal with from knowing about the product to purchasing it. Let’s break down why this is so efficient by looking at the theory behind a sales funnel.
Before we dissect the layers of a sales funnel, it’s important to clarify some terms.
A marketing qualified lead (MQL) is a lead that has been determined by the marketing team to be likely to make a purchase. This can be seen through their engagement with different aspects of your business, for example; if they always follow through on calls to action (CTAs) that appear on your website.
A sales qualified lead (SQL) is a step after the MQL in which the sales team qualifies that a prospective customer is at the buying stage of the funnel.
Okay now let’s look at the funnel:
Aayush’s NoteAt Squeeze Growth, we believe the modern sales funnel starts with interest identification. Or market research, whatever you call it – it’s all about concept marketing. To find if what we wish to sell, has a market or not. If there is a marketing, how big, profitable and scalable is it?
Because without “need”, there is no purchase. Many would argue, people purchase based on instinct, emotion and value too. So, need isn’t particularly necessary, and I agree. But, it all depends on how you define the need.
Luxury is a need, buying on FOMO is a need too. We believe, need is at the top of the funnel.
Top of the funnel, Awareness/Interest:
This is when a consumer becomes aware of your product. On your website, this can take the form of a CTA but it could also be an Instagram post showing off a product or service. In the example above, with Hellofresh, the top of the funnel would be the influencer-sponsored content which made the prospective customer aware of the service.
In the example of Hellofresh, every part of their sign-up process from steps 1 to 5 would count as the top of the funnel. Once the prospective customer is on the website and interacting with the content, they move into the second part of the top of the funnel: interest.
At this stage, the prospective customer is still at the top of the funnel because they haven’t committed to the product but they have shown a level of interest greater than an initial glance at the site.
Middle of the funnel, Consideration/Intent:
This aspect of the funnel is the hardest to master and will probably be where the majority of customers escape your funnel.
This is because this stage requires the prospective to switch from a perspective of initial browsing and , idle interest to serious consideration and intention to purchase. The top of this stage of the funnel is a consideration when a customer registers their email address with Hellofresh for example.
At this point, the marketing team can market more directly to them, with emails about other free offers or useful information. The prospective’ interaction at this stage will decide whether they are an MQL, in other words, more likely to become a customer compared to other prospective customers.
If they are successfully deemed an MQL by the marketing team, they are then in the intention part of the middle of the funnel. Crucially, however, although an MQL may have the intent to buy, they are currently not ready to buy.
Bottom of the funnel, Evaluation and Purchase:
At this stage, the customer is ready to purchase the product. This can be determined by the sales team. Once a sales team deems that a customer is ready to purchase, they become a SQL (Sales Qualified Lead.)
Now, the most important objective is to show how your product is superior to other competitive products, with the intention of closing a sale. A good way of doing this is by having an FAQ section to dispel any possible confusion or uncertainty about the product or service.
Helplines, detailed product information and sales emails are also incredibly useful during this point in the funnel.
Now… the prospective customer buys the product.
Now that you understand Sales Funnels, here are some tools and strategies to get the most out of it.
Closed-Loop Analytics Software
Closed-loop analytics is a technique used to qualify a lead. It involves the sales team giving information to the marketing team about how customers interact with the website. This will help the marketing team to decide if the customer is an MQL or not.
A useful piece of software that can help with tracking the patterns of customers is google analytics. The free software has many useful features including tracking the number of customers on your site, the type of device they are using and, most importantly, what brought them there.
This will help you to optimize the top of your funnel as it will be clear which top-funnel aspects work and which do not.
This software is specifically designed to improve your sales funnel. If you choose to use ClickFunnels, I recommend switching away from the first few default funnel templates, since they have been overused by many users through the years.
You start by deciding on a sales funnel template, for example, the fishbowl funnel (pictured below). From then you can customize that template with a variety of different options in order to best suit your business.
It also allows you to create upsell opportunities and promote other paid and free content. This software is rather specific so if you’re looking for a more general marketing automation software that has sales funnel options in it, I recommend Ontraport.
For context, a fishbowl is a type of funnel which aims to up-sell a customer by offering giveaways and bonuses.
This tool achieves a similar objective to ClickFunnel but its layout is especially unique and intuitive. The software allows a user to drag and drop different aspects of their sales funnel onto a diagram.
On top of that, Funnelytics allows users to view data on how well the sales funnel is performing.
It can also run simulations to predict weak points that need to be sorted, a bit like a stress test for your sales funnel. Some of these features are exclusively in the paid version but there are plenty of useful features which are available in the limited free version.
GetResponse’s autofunnel aims to make the process of creating a sales funnel far easier by automating it. There are more than 30 expertly designed conversion-optimized scenarios that allow you to choose a conversion-optimized sales funnel template suited to your business.
An example of a conversion-optimized scenario would be their email forms, present in the middle of the sales funnel. You can choose an email form scenario that would suit your business and its target demographic.
Autofunnel takes you from the very top of the funnel, with expertly designed Google and Facebook ads, to the very bottom, with payment processors. The service has a 30-day free trial and is $49 per month after that. For the comprehensive nature of the service, the price is great.
Sales funnels can seem complicated at first due to the variety of different information available online.
However, I hope this article has helped to dispel some of the confusion around the topic because an efficient sales funnel will propel your head and shoulders above the competition.