what is a sales funnel

Understanding What a Sales Funnel Is and Why You Need It

Starting up a business from scratch is hard enough, but gaining buyers is even more difficult. If you are a beginner in the realm of entrepreneurship, you’ll wonder how established businesses have carved a name in the market. And the answer to that success is knowing what a sales funnel is and understanding how it works.

What is a sales funnel?

A sales funnel refers to the path taken by any person into becoming a buying customer. It is a marketing concept that allows you to map out the whole journey of how customers find out about your product, get piqued with your brand, make up their mind, and finally, buy from you.

When business owners understand how sales funnels work, they can easily plan out a sales process that will convert website visitors into paying customers. With an effective sales funnel, any business can have consistent sales. 

A funnel is a metaphor for the inverted pyramid that manifests how a chunk of the large audience sitting at the top will go down the bottom to become customers. This funnel shows the different stages that consumers go through before deciding to purchase from your business.

The top part consists of website visitors or any persons that get introduced to your brand. As the funnel gets narrower, these audiences decrease as they decide if your products or services are worth the try. The bottom manifests how much conversions happened through various marketing efforts done. This means that having a higher number of prospects is more likely to convert leads to customers.

what is a sales funnel

The importance of a sales funnel

A sales funnel is essential in building a profitable business. It allows you to pinpoint the right efforts to take and materialize business goals. Here are some reasons businesses benefit from understanding a sales funnel. 

  • Helps you curate effective marketing strategies and business models to yield more conversions
  • Makes you understand how to relate better to potential customers to further drive them into buying
  • Pulls in more sales as you already know how to tickle leads into becoming customers
  • Gives you a concrete direction where your business is heading to
  • Provides a competitive advantage over newcomers in the business as you already have established an effective business plan
  • Shows you a clear overview of what strategies are working and what not
  • Lets you track the progress you have made in every strategy
  • Defines your strengths and weaknesses in sales so that you can improve your strategies
  • Allows you to develop in-depth strategies to retain customers

The four stages of a sales funnel

To further understand how a sales funnel works, here’s a breakdown of the four phases of converting visitors into buying customers.

1. Awareness stage

The first phase refers to how a lead knows your business’s existence. When a person is mindlessly browsing on the net and randomly sees your business, that’s the first stage of knowing your brand.

This happens when the audience sees your ads on various search engines, like Google, and social media sites, like Facebook, Instagram, and Twitter. They can also stumble upon your website organically through intentional research, or have known about your business through word of mouth and referrals. 

To put it simply, during the awareness stage, your business should woo potential buyers to check out what you offer. This will then lead to the second phase. 

what sales funnel is

2. Interest stage

In the second stage of the sales funnel, the prospects are already looking for solutions that you could provide. This creates the curiosity to learn more about your brand since they are already aware of what you are and what you offer.

As a result, these people will be browsing through your website, social media pages, and even the available online catalog you have. When they get interested in what you offer, they will follow you, engage with you, and even subscribe to your email list.

In this phase, you don’t want to chase them off by hard selling and flooding their timeline with your posts. Establishing your value should come out naturally to provide them the information they need from you.

3. Decision stage

This phase is where the prospective buyers are making up their minds about your offered value. In simple terms, this is where they think of buying. With a variety of options, they are now weighing down, which is the best choice to purchase. 

A great strategy to trigger them to buy from you is by having some promotional offers they can’t resist. These can be in the form of special discounts and codes, free shipping, referral rewards, etc. When you add even better value in what you are already selling, prospects will be more interested in buying.

This is the crucial stage for business as this leads to the final decision of the potential buyers. Are they going to buy or not? 

4. Action stage

The final stage is where the prospect converts into being customers. The customers made a purchase from you who are now a part of your business ecosystem. 

This is where you aim to be most successful in understanding how sales funnels work. When customers reach the bottom, you are generating sales—making your business flourish. 

However, your work isn’t done yet when a customer buys from you. You should also aim to retain these converted customers. This way, you are generating consistent sales and making buyers to loyal customers. Remember, these customers know the quality of your product or services—they can either be an advocate of your brand or a detractor who can spread the word to others.

There is a lot more to know about what a sales funnel is, and you can get more in-depth knowledge when you take this insightful online course, Sales Funnel Blueprint for Beginners. This mastery course will teach just how effective the sales funnel is in building your business as well as the methods on how you can create and optimize your business’s sales funnel.

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