The sales funnel: What is it and how do you create one for your business?
- Last Updated: December 11, 2023
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- 5 Min Read
A sales funnel illustrates a lead's journey through a series of stages, from becoming aware of your brand to eventually becoming a customer. An easy way to understand this concept is by picturing a real-life funnel. Just the way liquid passes through a funnel, from the wide opening at the top towards the narrow opening at the bottom, each prospect will pass through different stages, progressing towards a purchase. The further down they go, the higher the chances are that they'll become a paying customer.
The funnel representation makes it easy to visualise and identify a potential customer's location in their buying journey. This insight could help you decide what actions to take to guide the prospect to the next stage. It can also help you improve areas where you notice more drop-offs.
Stages of a sales funnel
While the stages of a funnel can vary based on how a business functions and its end goal, a basic sales funnel typically consists of four stages:
A potential customer steps into your sales funnel when they come across your brand for the first time. While some may have discovered your business through their own research or word-of-mouth, others may have caught a glimpse of your business through ads, social media posts, blogs, or any of your other marketing initiatives. To attract your target customer, conduct brand awareness activities and create content that's relevant to your audience.
You can do this by:
Sharing your expertise through quality blog posts
Posting engaging social media content
Conducting webinars on topics relevant to your industry
Creating gated content, like ebooks and white papers
If you want to guide your prospects toward recognising that you have a potential solution to their problems, you need to promote content that acknowledges their specific concerns and shows how you can address them. You can do this by sharing informative materials, like customer case studies, product demos, video tutorials, and webinars. When the prospect sees value in what you're offering, they may feel genuine interest in learning more about your business and start to engage.
When a prospect reaches the third stage, it means they are seriously considering a purchase. Of course, this doesn't mean they're not evaluating your competitors. The best course of action here is to actively follow up, build trust, and politely reinforce all the benefits they would receive by choosing your business over others. Free trials, discount vouchers, and in-person training can all work in your favour. You've managed to bring the prospect a long way in this journey, so do all you can to convince them.
Once your prospect reaches the bottom of your funnel, they are ready to make a decision. If they decide to go ahead with the purchase, it's time to start working on strengthening your relationship. Your ability to nurture the customer relationship post-purchase will impact retention and the overall perception of your business. During the nurturing process, identify areas where you may be falling short of expectations, and make the necessary improvements. When customers notice the effort you take to exceed their expectations, they often feel encouraged to stay loyal to you.
Steps to create a sales funnel for your business
1. Define your target audience
When you're running a business, it's important that you communicate with your audience effectively and create marketing campaigns that resonate with them. To do this, you need to have a deep understanding of your target audience's interests and pain points. It's also helpful to keep track of other important details, like their typical age group, location, and behavioural traits, so you can make informed decisions about marketing and communication.
Check out this blog post to learn why having a customer profile is important, and how you can build one for your business.
2. Develop a marketing strategy
To draw people into your sales funnel, you need to craft an effective marketing strategy that sparks interest in your business. Whether you do this through SEO, paid ads, social media promotions, or event marketing, the goal is to attract quality leads from a variety of sources. This way, you can reduce the risks associated with relying on a single source for revenue growth. From choosing the platform where you'll reach your audience to deciding how you're going to engage, it's important to have a clear plan for converting a visitor into a qualified lead, and guiding them to the next stage.
3. Create effective landing pages
Landing pages are web pages designed to persuade people to take a targeted action. They are effective because they keep your audience's attention focused on a specific goal. With targeted messaging and clear calls to action, well-designed landing pages can convey your brand's value more effectively and boost your conversion rates.
4. Use a CRM
When you automate your sales process with your CRM, you can easily visualise your funnel and clearly understand what's happening at each stage. A good CRM will not only help you track and identify the leads you should pay more attention to, but also help you automate various tasks in your sales process, like sending follow-up emails or updating contacts. The AI capabilities in Zoho CRM can even help you detect deviations from your projected sales pattern without the need for manual intervention.
5. Nurture your prospects
When prospects are still in the early stages of research, they may need time to make an informed choice. During this phase, you should look to nurture them by sharing relevant resources, being available to answer questions, and regularly following up. When you nurture your prospects the right way throughout their journey, you'll be at the front of their minds when they are ready to purchase. The only catch is that you need to do it without being too pushy.
6. Track and optimise
While you're busy closing deals, it's important to keep tracking what's working for your business and what's not. For example, if there is a particular stage where your prospects seem to get stuck, dig deep to find out what's delaying them from moving to the next stage of your sales cycle. An easy solution is to use a CRM with good analytics capabilities so you can find underlying trends and get insights into customer behaviour. All this data can help you optimise your customer journey and increase your likelihood of closing deals.
We hope this blog post helps you understand why a sales funnel is important and how you can easily create one for your business. Are there any other topics you'd like us to cover? Let us know in the comments below.
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