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Have you ever wondered about your customer journey process and how they end up making a purchase from your organization?
A customer's journey is thoroughly mapped by a sales funnel, which outlines all the touchpoints your customers interact with your brand before they are ready to make a purchase.
Without solid sales funnel software, it is extremely tough to convert leads into paying customers and grow revenue over time.
So, where is the disconnect?
Answer - Lack of a functioning sales funnel!
To make a sale, you need to have a sales funnel in place and this is where an optimized sales funnel makes all the difference. Without one, your team might be riding high on the guesswork!
This article will cover the following -
- What is a sales funnel?
- Why is the importance of a sales funnel?
- What are the stages of a sales funnel?
- Sales pipeline vs sales funnel
- How to build a sales funnel in 2022 (With an example)
- The importance of sales management
- 3 important sales funnel key metrics to track using a sales CRM
What is a Sales Funnel?
A sales funnel is a pictorial representation of your buyer's journey right from their first interaction with your product till they make a sale.
In simple words, the sales funnel is a multi-step process that converts leads into buying customers.
A sales funnel is a marketing term that maps out the journey a customer goes through when making a purchase.
Creating a sales funnel helps sales teams identify possible loopholes in the sales process to understand where prospective customers are losing interest.
The definition of a sales funnel refers to the fact the sales process is like a pictured funnel - meaning it is widest at the top and narrowest at its bottom. Each stage of the funnel pushes your qualified leads into the next stage and pushes those that are not a fit.
A sales funnel is directly related to the customer journey phases - top, middle, and bottom of the funnel.
The sales funnel process shows that prospects go through -
As prospects pass through each stage of the funnel, they indicate a more profound commitment to their purchase goal. Most businesses use sales funnel template to guide their marketing and sales efforts at each stage of the sales funnel.
What is the Importance of a Sales Funnel?
A well-defined sales funnel helps you understand your customers' interest in your product at various points of the buyer's journey.
Each step is a micro-conversion that can be optimized to increase overall conversions; if one of these steps visualizes a higher-than-expected drop-off rate to analyze what's wrong and test out possible improvements.
Tracking each stage of the funnel carefully can help you determine how each lead should be approached, which product suits them the best, and what messaging should you use to close the deal.
Getting the right communication at the right time prevents losing prospects by bombarding them with too much information, sometimes irrelevant, or giving them the hard sell too early.
78% of buyers seek salespeople who act as trusted advisors who are well-versed with their industry.
For instance, successful companies such as Spotify, Nike, and Frito Lays have taken their time to figure out a process that attracts the right leads and turns them into paying customers.
A clearly defined sales funnel provides sales reps with insights that give them ammunition to follow up with the right kind of sales activities via the right channels, which propels a lead into a buying customer.
Stages of a Traditional Sales Funnel
While each business's sales funnel has its own way of managing the sales process and buyer's journey, the number of stages in your sales funnel depends on your niche, industry requirements, and more.
There are four primary stages of a sales funnel -
- Awareness stage
- Interest stage
- Desire stage
- Action stage
1. Top of the Sales Funnel: Awareness and Discovery
A sales funnel starts when a prospect becomes aware of your company, service, or product.
The awareness stage is the widest part of the funnel - this may be the first interaction they've had, maybe with your website, read your social media post, or even heard about you from existing customers.
Typically, at this stage, your potential customers are facing a challenge and are researching for solutions to solve their pain points.
They have a myriad of questions trying to verbalize their problem and look for a trusted solution.
The best way to get the prospect's attention is to generate enough interest upon initial exposure that the prospect signs up for a valuable resource free of cost in exchange for their contact information.
This will also help your team to segregate your target audience and buyer personas by gathering data and deepening your understanding of customers.
Strategies for the Awareness Stage
- Develop a clear brand message and mission statement
- Specify in your messaging the problem your product solves
- Clarify your ideal customer's demographics and psychographics
Ways to Build Awareness for your Brand
- Social media posts
- Search Engine Optimization (SEO)
- Content marketing
- Print and radio ads
- Company website
- Affiliate marketing
Tips for the Awareness Stage
To determine which marketing efforts work the best, look at your analytics for your website and the corresponding keywords that are ranking for your audience. Leverage online marketing automation tools to gauge how well your audience is interacting with your product and the traffic it brings.
2. Middle of the Sales Funnel: Qualify and Research
As prospects move down the funnel from the awareness stage, they'll be pushed down to the interest, or the middle of the sales funnel.
Interest equates to comparing your product with your competitors, free trial, in-depth research, and mulling over their various options.
Increasing their interest may start with online content describing topics relevant to your business's offer and, in turn, building authority and credibility with your brand.
At this stage, your potential customers shift their focus by taking steps to follow your social media channels, subscribing to your email marketing list, asking questions or even sending direct messages.
Your sales reps initiate a discovery call, sales meeting, or a demo with the potential customers to identify their challenges and explain how your product can solve their pain points.
This stage is crucial for sales teams to push the lead to convert leads and make them into paying customers.
Strategies for the Interest Stage
- Create blog posts addressing the customer's pain points
- Identify the top keywords your prospects use when they look for information online
- Create engaging content that speaks to your ideal customer's pain points
- Drive targeted traffic to your website and social media channels
Ways to Promote your Product in the Interest Stage
- Email marketing
- Blog posts
- Social media accounts
- Free trial
- Retargeting campaigns
- Product demos
Tips for the Interest Stage
The goal is to engage with your prospects and establish trust so they want to subscribe to your newsletter or email marketing list.
To increase the likelihood of opting for the subscription and updates from your company, focus on producing great, but relatable content for your website.
Some ways to engage leads are eBooks, free resources such as tools that will help the prospect as an incentive to join your mailing list, and more.
3. Bottom of the Sales Funnel: Decision and Purchase
The final stage is the bottom of your funnel is when your customers know everything about their problem, the best type of solution for them, and are ready to make a purchase.
This is why their concerns and questions in the final stage become more specific to the vendor, following the narrowing shape of a funnel's bottom
In turn, your sales reps present a proposition, terms of the contract, and other agreements to successfully win their deal.
The outcome of this opportunity may sway either way - win or loss - depending on the prospect's interests at this stage. Although sales reps set the table for success, handling objections and negotiations, when it comes to closing the deal, win rates are quite unpredictable.
If the purchase is made, your sales rep will move the deal to the won stage in the sales process and begin onboarding the new customer.
Sometimes, leads may slip through the cracks for reasons that are beyond one's control. It is vital to keep these records in your CRM tool so you can track the reasons why the deal was lost, and nurture them in the future to win back their business.
Strategies for the Decision and Sale Stage
- Retargeting ads
- Case studies
- Feature comparisons
- Product video
- Build the relationship with consistent, relevant emails
- Perform consultations
- Follow-up quickly
Ways to Promote your Product in the Decision and Sale Stage
- Special tips
- Bundled packages
- Follow-up emails
- Product use or training videos
Tips for the Decision and Sale Stage
To increase the likelihood of a sale, focus on ways you can make it easy for your potential customers to buy. As you build a perfect sales funnel, build a list of email subscribers to boost sales with various types of email marketing strategies.
Gauge how well your digital sales process is and consider testing out the checkout process to see if anything could impact the way they make the purchase.
Consider monitoring small changes to see if you can improve customer retention and conversion rate.
Sales Pipeline Vs Sales Funnel: What Makes it Different?
If your organization has been using "pipeline" and "funnel" to mean the same thing, you might want to pay attention.
Sales pipeline and sales funnel both describe the flow of potential customers through a sale, but there indeed is an important difference between the two commonly used terms.
A sales pipeline represents the stages a buyer passes before becoming a paying customer, however, a sales funnel represents the number of prospects that make it via the same stages of a funnel software.
A sales pipeline refers to the total number of possibilities, in all stages. These will be handled by your sales reps at any given time to show the quantity, value, and stages of open deals.
A sales pipeline focuses on the brand and looks internally at stages that your sales and marketing teams need to move a prospect in order to make them a customer and retain them.
Though the structure of a sales pipeline can differ from company to company, here are some of the common stages -
- Lead generation
- Qualify leads
The sales funnel overlooks the whole customer journey, from the point of a lead.
Simply put, a sales funnel refers to the path that prospects follow to eventually become a customer.
It's called a funnel because of its visual representation - wider with new leads on top from the broadest most qualified audience, with potential buyers dropping off gradually at each stage until you reach the final number of paying customers narrows at the bottom.
A standard sales funnel has at least four stages -
- Evaluation and Consideration Stage
A simple difference between sales funnel & sales pipeline is that the sales funnel is about the customer and their journey while sales pipeline is about the sales process
How to Build a Sales Funnel for your Business in 2022 (+ Example of a Sales Funnel)
Your sales funnel is only as effective as the work you put into it.
Although some products might sell themselves, a vast majority require constant experimentation to find an effective sales funnel structure.
From defining your funnel stages to automating lead generation, as a sales manager, you can set up your sales funnel software to help your sales team advance their leads’ progress and stop them from dropping off the funnel.
Here's a blueprint of the sales funnel you can use for your business -
- Capture leads entering the sales funnel
- Qualify and engage leads in the funnel
- Moving leads through the funnel
- Create opportunities
- Re-engage and nurture lost leads
#1 Capture Leads Entering the Sales Funnel
Businesses generate leads via a myriad of channels.
One of the best ways to speed up the sales process is by organizing and capturing leads via CRM software. It is broken down into modules to manage leads, customers, and opportunities.
The first step to set up your own sales funnel is to capture leads. For instance, leads who get in touch with you via your homepage, sales forms, leads who email you, and more.
Tag these leads based on their categories to simplify their process.
Some ways to capture leads are -
- Placing pop-ups and CTAs in strategic places on your web pages
- Intuitive chatbots to engage website visitors in conversations
- Referrals from your existing customer base
Some CRM software has the capability to capture leads who visit your website, submit a form, and even email your sales team automatically and segment them based on their categories.
This automation cuts down sales reps' time in half and helps them focus on pushing a sale, and assigns a sales rep to every lead too.
Leads that enter this stage are assigned as 'new leads', since it is at the top of the funnel, which is the broadest of the funnel.
When sales reps interact with these leads, they're automatically moved to the next stage.
A well-seasoned CRM software helps you analyze the progress of leads that have entered your sales funnel to help sales reps to plan their sales strategies effectively.
#2 Qualify and Engage Leads in the Funnel
The biggest challenge for a sales manager is to be able to identify qualified sales leads.
Qualifying leads is the most critical stage in the funnel as it directly impacts the productivity of a sales team.
A seasoned sales rep probably knows how to qualify leads over time, but for the rest of them, it is still a burning issue.
The struggle to pick out the right qualified leads in the sales funnel forces a sales rep to chase all leads, irrespective of their fit.
The result - is getting nowhere.
A sales rep's time is valuable and pursuing every lead with the same effort is like shooting in the dark.
This is where CRM software can help with lead management and forecasting capability to benefit your team and save their overall time.
With the leverage of AI, sales teams can easily qualify and engage leads based on their interest and behavior to contact them via phone or email and push them further down the funnel.
Using separate tools to track and contact your leads at different stages of the funnel can be difficult and lead to errors.
Leverage CRM software to automate the process with a built-in email marketing tool and call management process via a powerful workflow.
Modern CRM software can track your emails and alert you when your lead opens the email. This can help your sales team to know when to take action and move them to the next stage.
The best sales funnel software allows you to make calls in a single click, auto-logs and records calls, and transfers call to available sales agents without the need for third-party tools.
#3 Moving Leads Through the Funnel
In this stage, the customer has shown interest in purchasing your product.
A good practice when managing leads in your CRM software is to be consistent in updating the lead stage correctly.
As leads trickle down the funnel, you must be able to analyze the number of leads in your funnel to ensure there are minimum leads drop and is always full with leads. It is also extremely important to know what lead is at which stage to be prepared beforehand.
In order to close the deal, your sales reps need to persuade them with helpful resources that can aid them in making a purchase. This could include either a free trial, a demo of your product, an extended subscription, or even a discount.
At this stage, it is extremely crucial to ensure your sales team update their records at regular intervals.
An efficient CRM software can automate this whole process to simplify deal qualification in your organization.
Sales stages such as deals qualified, or appointments scheduled can be automated and keep other team members in the loop too.
Set up powerful workflows in your CRM software to fill gaps and speed up the process with automation rather than relying on manual power.
#4 Create Opportunities
This stage of the sales funnel is extremely important. Once you move the lead further down the sales funnel, it is vital to create relevant opportunities by quantifying their value.
This is where you can leverage a sales CRM software - track and analyze each opportunity with maximum visibility.
Visual sales pipeline provides a quick overview of all stages of your sales funnel, allowing you to see how leads are moving throughout the funnel. It also provides sales reps with a quick estimate of their leads and urges them to add more leads.
#5 Re-Engage and Nurture Lost Leads
Converting all leads that enter your sales funnel is a herculean task.
Not all leads are going to convert and it is a fact.
But with CRM software in place, when a potential sale falls through, all the information regarding the sale is available at fingertips - take a step back and assess what went wrong and what could have been done right.
An intuitive CRM software lets you identify the reason behind the loss and help you fill gaps in your existing sales funnel.
Create re-engagement campaigns in your CRM software and target your lost leads by providing value with an aha moment such as case studies, ebooks, webinars, and more.
The key is to make your leads feel that you were not there just to make that sale, but to nurture a relationship.
Lead nurturing is the process of actively engaging with leads via targeted campaigns. With CRM software, you can utilize tools designed especially for lead nurturing from the time they enter the sales funnel to when they make a purchase.
Example of an Ideal Sales Funnel
Your sales funnel is as effective as the work you put into it.
For a proper sales funnel to exist, you need to first identify your potential customers who can move through the funnel.
Here’s an example of how to create an ideal sales funnel for your business -
1. Understand your Target Audience
Identifying your ideal target audience is the most vital step in building an ideal sales funnel. If you do it right, you can figure -
- Where they seek answers from
- How you can effectively solve their pain points
- How to properly position your product
The most important questions to ask your customers are -
- What are your current challenges?
- What are your goals?
- What have you done in the past to solve your challenges?
- How well did it work?
Based on your data, you can create content for each stage of the funnel - ToFu, MoFu, and BoFu to help potential customers move down the funnel.
2. Capture your Audience’s Attention
Without potential customers and people interested in your business, there is no sales funnel.
This means putting the right kind of content in front of your target audience.
Some of the most common ways to drive traffic to your business are -
- PPC campaigns and social media advertising
- Search engine optimization (SEO) to help you rank higher on search engines
- Guest posting to bring in indirect and direct traffic
- Influencer marketing to spread awareness from a trusted source
- Outbound email campaigns to start a conversation
3. Build an Effective Landing Page
Your paid ads and organic marketing need to take your prospects somewhere - this is where a landing page with a powerful CTA comes in.
If they click on an ad, sign up for your webinar, or even download a resource - they have to be redirected to a landing page.
Make sure to communicate who you are as a company and your unique benefits. Focus on capturing leads instead of making a sale.
In addition, ensure the landing page has a form to fill in their information for potential customers so you can communicate with them regarding your next step.
4. Create an Email Drip Campaign
Now that you have captured the interest of your prospects, it is time to start a communication channel with them.
Market to your leads via email marketing by providing value and engaging content. Send updates regularly, but not too often.
At the end of your drip campaign, make an incredible offer that they cannot resist. That’s the piece of content that will push them into making a purchase.
5. Keep the Communication Going
Once your prospects turn into paying customers, do not forget about them.
Continue to reach out to them by sending useful, educational content. Thank them for their purchase and send them regular updates about any promotions or sales.
Involve them in your social media strategy and build a community for your customers to develop brand trust and loyalty.
The Importance of Sales Management
The sales funnel essentially captures the movement of a lead through the sales process.
It’s not just a visual representation of the numbers in the form of a funnel, there’s more to it.
A sales funnel can help you analyze the number of leads who enter your funnel and the number who convert to customers and find a reason for a dip in these conversions.
While it’s impossible to convert every lead that comes in the funnel, it is vital that your sales team know who to chase and who not to.
Given the volume of leads that fill your funnel, sales teams have a hard time trying to convert leads into paying customers because they cannot differentiate between hot and cold.
This might result in leads dropping out from the funnel, or remaining stuck somewhere in the funnel eventually becoming cold leads, For an organization, this means losing out on money and business opportunities and that’s just one leak - there could be more leaks.
Make use of CRM funnel software to qualify leads, track them at every stage of their buyer’s journey, and follow up without any hassle on time.
Leveraging a CRM tool with sales funnel management capabilities positively impacts sales teams’ performance by leaps and bounds.
A sales CRM has more capabilities beyond just storing customer databases - it helps you define your sales process, identify possible cracks in the sales funnel, and streamline the conversion process to bring leads down to the bottom of the funnel.
3 Key Sales Funnel Metrics to Track Using a Sales CRM Software
KPIs and conversion rates are key aspects for sales teams to understand their sales funnel clearly.
Here are 3 key sales funnel metrics you should track -
#1 Lead Velocity Rate
This metric refers to the growth in your qualified leads, month on month - to measure how many leads you are currently working with are converting to customers.
This metric is a real-time indicator of growth and sales revenue.
Thus, a high lead velocity rate = high sales revenue.
#2 Conversion Rate
With sales funnel software, you can create funnel reports to know how your leads are converting through different stages by sales reps. Analyzing which leads move down to the funnel and converting lets you plan better conversion strategies.
#3 Time Spent On Each Stage
Always ensure not to rush their leads into the next stage of the process if the lead isn’t ready to move on.
Remember - no one likes an aggressive sales rep, and moving your lead along too quickly can backfire on you.
Keeping track of the time spent on each stage will allow you to shorten the sales cycle and create one that is effective and converts.
With your potential customer’s pain points and questions in mind, mapping out a sales funnel and implementing a start-to-finish sales funnel will make your team productive and efficient.
Remember, your work is not done when you create a sales funnel - this is where it all begins.
It is vital to measure your results - choose your KPIs, and then set up a measurement program. Take time to build out a sales funnel that actually works for you and addresses everything your audience wants.
Gather around data, analyze, and improve your sales funnel to get better results.
A good flow of people right from the top all the way to the action stage will ensure you have a successful business.
If you’re looking for an intuitive sales CRM tool with the capabilities to transform your sales team and boost your revenue engine, book a demo with Salesken to help you capture leads, nurture them, and convert them into paying customers.
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