What is a sales funnel?

Magical guide about #productmanagement. Part 8 article #57

A sales funnel is a marketing model that displays the path of a potential customer, starting from the moment of his acquaintance with the product and ending with a purchase. A sales funnel is also called a marketing funnel, as well as a conversion funnel or a customer funnel.

Any business, no matter how new it is, has its own sales funnel. Marketing funnels are different. Some schemes are quite simple, others consist of several stages based on the sales business model.

In 1921, C.P. Russell in his article proposed the abbreviation AIDA (advertising model), according to which the following stage names were fixed:

• Attention 
• Interest 
• Desire 
• Action 

Today, marketers continue to modify it to meet the needs of modern customers, as well as to achieve their goals. A well-developed and carefully monitored sales funnel can transform a business into a successful, profitable company in a fairly short period of time.

Why Do You Need a Marketing Funnel

Every online entrepreneur knows how disappointing the loss of sales is. It’s especially hard when you spend all your time, effort and money convincing customers, and they don’t make purchases. If you are currently in a similar situation and you are not satisfied with the current result, it’s time to create an effective customer funnel. In large companies, its development is in the first place. Therefore, if you want to succeed in the vastness of e-commerce, you also need to pay special attention to creating an individual sales funnel.

What is the significance of the sales funnel

An effective funnel helps:

• attract new customers and convert them into buyers;
• find out the total number of leads;
• identify weaknesses;
• track visitors who have not converted;
• predict the sales result;
• turn a customer into a regular customer;
• significantly reduce marketing costs.

How the funnel reads:

• 118,748 users visited the site;
• 36,346 of them viewed the product;
• 3,916 of them added products to the cart;
• 360 users eventually made an order with a discount;
• he conversion from a visitor to a buyer on the site was 0.3%.

If too many visitors leave at one stage of the funnel, you need to check if everything is in order there. There is a possibility that users lack a quick reaction from you: they face a problem, can’t solve it on their own and leave. It is important to set up the funnel so that at each stage users instantly receive the necessary information.

How to build an effective sales funnel?

Before building a funnel, it is important to determine the marketing concept of the product. It will help to create a working sales funnel and consists of 7 steps:

Create a USO

USO is a Unique Selling Proposition through which you broadcast the benefits of your product to customers and stand out from competitors.

2. Gather a database of “cold” customers

These are users who don’t know about you, or know, but aren’t ready to buy yet. You can build such a database using:

• Search engines. Make a list of search queries by which potential customers can search for you. For these queries, optimize your site from the point of view of SEO, so that it appears as high as possible in the search results.
• Contextual advertising will also help to attract the base in search engines, so that the link to your site falls right under the search bar.
• Chat, chatbots and pop-ups on the site. These tools will help attract users who have visited your site for the first time. For example, using a chatbot, you can find out about the user’s tasks and problems, and offer a solution in return for contacts.
• Lead forms on the website. Place contact collection forms on all pages of your site. It is important to convey the value of your product in them so that a person decides to leave their data.
• Social networks. If your pages are not very active, fix it. Regularly post on social networks and set up targeted advertising for your target audience.
• Guest posts. Explore companies whose target audience is similar to yours, and agree on cooperation: posting articles on each other’s blog, partner mailings and mutual reposts in social networks.
• Referral programs. You probably have customers who love your product the most. Ask them to tell their environment about you in return for bonuses.

3. Generate interest in the product

You have collected a database of “cold” leads. Now it needs to be “warmed up” so that the leads become buyers. Pop-ups and warming email newsletters with bonuses or discounts will help in this. A chatbot on the site will also help, which will convey your value to the user.

4. Work out objections

With the help of a chatbot, chat or pop-ups on the site, conduct a survey among people who have not yet bought from you. Ask what prevents them from making a purchase. Based on the answers, you will be able to understand how to work out objections: is it possible? users don’t understand something about the product, and they need to work on the descriptions on the main landing page or invite them to a free demonstration of the service. Or the customer is confused by the price, and you can offer a discount.

5. Pay attention to the closing stage of the transaction

At this stage, the work of managers is important. If a person started to subscribe, and did not pay, or put the goods in the basket, but did not place an order, he needs help. You can set up a chatbot on the site that will prompt the next steps or connect an operator.

6. Analyze the sales funnel

When you build a sales funnel and launch it in your product, it is important to constantly analyze each stage in order to find places from which more users leave. With the help of surveys and audience research, you will be able to identify the main reasons for the departure of your customers. This will help you adjust your marketing actions, the work of managers and the product itself.

7. Work on increasing the conversion rate at each stage

After analyzing the funnel and researching users, use the collected data to improve your funnel. Build hypotheses to increase conversion, set up closer communication with customers in order to reduce churn as much as possible at different stages.

What stages does the sales funnel consist of?

According to the classic AIDA model , the funnel consists of four stages:

1. Awareness. At the first stage of the sales funnel, the user learns that your company exists. For example, he sees an advertisement in a social network or a link in the search results.
2. Interest. The user is interested in the offer: looks at the catalog, studies the terms of delivery, payment methods and other details.
3. Desire. The user adds an item to the cart and wants to buy it
4. Action. The user performs an action: places an order, subscribes to a newsletter, calls a contact number, and so on.

How to improve the sales funnel?

1. Combine marketing and sales. It is important for teams to have common goals and know how they interact with the client at their funnel stages. We talked about our experience of combining sales and marketing.
2. Qualify leads. At the initial stage of communication with the user, find out all the information you need so that almost ready-to-buy customers come to sales.
3. Transfer only target leads to sales. Do not blindly collect the database and pour it all on the sales department. Save time for both teams and decide who you want to sell to. And then come up with criteria that will help you determine the target leads. This will help weed out disinterested users.