Sales funnel — what is it and how to build it well?

Customer contact is an integral part of the process of selling products and services. Although at first glance it may seem easy, attracting and keeping the attention of potential customers until the transaction is finalized is quite a task for any marketing department. It often happens that the contact breaks off in the middle or almost at the finish line and despite a large number of so-called sales leads, the results are much weaker than expected. A low conversion rate is usually the result of an improperly built sales funnel. What exactly is a sales funnel and why is it worth taking the time to create one?

What is a sales funnel?

In a nutshell, a sales funnel (also known as a marketing funnel or conversion funnel) is a set of marketing processes divided into stages, the aim of which is to effectively lead potential customers from product/service interest to completing the transaction, i.e. using the offered service or purchasing a given product. Graphic representation of these processes resembles a funnel because at each successive stage there are fewer and fewer people (hence the name).

To illustrate it better, let’s use a simple example. The very top of the funnel (i.e. the widest part) gathers all the potential customers (i.e. sales leads) who visited the website. Those who have shown interest in a given product/service (e.g. by spending more time on a dedicated sub-page of your store) move on to the next stage — with the right tools, you can accurately track the behavior of your website visitors. Based on this data and thorough analysis, you can take action to turn that interest into an effective sale, e.g. using an appropriate CTA (Call To Action), which will transform a previously anonymous person into a real contact to whom you can direct specific marketing actions. A person who has filled out a contact form or signed up for a newsletter will move down the funnel. Continuing to maintain interest will eventually put them at the bottom and lead to a sale. This is, of course, a very big simplification, but it gives a certain picture of the situation facing the marketing department.

Properly constructed sales funnels allow you to determine the length of the sales cycle and thus create an action plan to achieve your business goal. Moreover, such a funnel also allows you to assess the effectiveness of the actions taken so far and learn about the actual needs and expectations of potential customers. This allows you to acquire really valuable leads, which is very important in both B2B and B2C sales.

B2B or B2C funnels — what’s the difference?

In both cases, the marketing funnel was created with e-commerce and increasing sales of a product or service in mind. Also, the classification of leads and the number of stages in the funnel are often the same — there are usually 4, although there may even be 5 or 6, depending on the specifics of the business and the internal arrangements for the sales process. So the differences between the two are not as significant as you might think.

A B2B (business to business) sales funnel is a tool for optimizing sales processes between at least two businesses/companies. A B2B marketing funnel should take into account the specifics of such a situation, including the fact that successfully selling a service to a business requires gaining trust and building relationships with more than one person. In most cases, the sales process must pass through multiple levels of management — from lower-level managers to the boss who will make the final decision. In addition, a B2B sales funnel usually closes with a face-to-face meeting or a phone call — finales (i.e., signing agreements or contracts) that proceed entirely online are much rarer.

In B2C (business to consumer) sales funnels, individual consumers are targeted at each stage of the sales process. In some respects, such sales of products or services may be easier — after all, to finalize a sale, you need to gain trust and hit only one person with your offer — but it requires a completely different approach to, for example, advertising or the communication process. In the vast majority of cases, transactions of this type are carried out entirely online and they find their finale there.

Why use a sales funnel?

Although it requires some work and effort, a well-prepared sales funnel brings many benefits. The most important of them include:

• possibility of accurate planning of activities carried out at various stages of sales,
• creation of a uniform system of evaluation and promotion of leads adapted to the company’s needs,
• constant monitoring of the effectiveness of the sales conducted at a given moment,

Thus, the sales funnel facilitates the selection of sales techniques and lead generation, and at the same time allows you to isolate the group of customers on which you should focus most, indicates the recipients who are not interested in your offer, saves time, and facilitates the monitoring of actions taken and their effectiveness.

By analyzing the different stages of the sales funnel, you can monitor the conversion rate in each phase of the sale. Controlling the number of recipients at each level allows you to determine the strategy on which to focus, analyze the quality of customers, the efficiency of the sales department, and isolate activities that are better to abandon. A well-optimized sales funnel is therefore the key to marketing success. A kind of icing on the cake is the fact that a good funnel enables virtually complete sales automation.

Funnel stages — what do they look like and what activities do they consist of?
As we have already mentioned, virtually all sales funnels consist of at least 4 stages. The next ones are as follows:

Stage 1 — Gaining attention and building brand awareness

The primary task of marketing and advertising and promotional activities are undertaken within the framework of it is to arouse interest in a given offer and build brand awareness in the potential customer. In the case of e-commerce, the addressees of these activities may be all visitors to your website. Products and offers should be presented in an accessible way — the message must be simple and easy to understand in order to reach as many people as possible. At this stage of the funnel, all potential customers are still completely anonymous — so you should not yet take sales actions, because you do not yet have knowledge about the needs and preferences of a potential customer.

At the first stage of the funnel, you can conduct the following activities:

Social media posts — Social Media has some time ago ceased to be just a place to paste cat pictures and has become a thriving marketing platform. When you’re targeting B2C customers, it makes sense to focus your marketing efforts on Facebook, Twitter, and Instagram, while for B2B sales, LinkedIn usually works better. Pay special attention to the quality of your posts — it has a big impact on how your brand is perceived by your audience. Publish high-quality images, interesting infographics, and valuable content.

SEO, Google AdWords — proper SEM activities allow you to reach the audience that has already expressed interest in your product or service, i.e. typed it into a search engine. A high position in Google has a positive impact on sales opportunities.

Content marketing — research conducted by GetResponse has shown that content marketing is most often used for promotional activities. So it should come as no surprise that more and more companies from various industries are starting their own blog, where they post not only news about their business, but also articles and tips that help solve real problems of Internet users. If a person finds a solution to their problem on your website, there is a good chance that the whole brand will gain in their eyes.

Word-of-mouth marketing — by building an image of an expert in a given field, e.g. by being very active on internet thematic forums, you will gain trust of a potential customer and thus increase the chance that he/she will reach for your services.

YouTube videos — there is no denying it — not everyone feels like reading. Especially if the text is very extensive or highly technical. By producing videos, you open the way to a wider range of potential leads.
Whatever you decide to do, remember to keep it in moderation — nobody likes a pushy ad that screams from every corner. Especially if the product in question isn’t actually as great as you might conclude from the content presented (see mobile game ads).

Stage 2 — Building interest and acquiring leads

People who have interacted with your website or offer are taken to the second stage — you’ve already got their attention, now you need to arouse their interest and keep them for longer. So you need to give them a chance to learn about a particular product or service while directing their attention to your sales pages (unobtrusively, of course), where they will find detailed information about it. This is where the already mentioned call to action (CTA) comes in, i.e. an encouragement to enter into a deeper interaction with your offer.

This could be an opportunity to ask your expert a question, sign up for a newsletter, organize a webinar, special discount codes unavailable anywhere else, or free product samples — all a potential lead has to do is leave their contact information (usually their e-mail address). Thanks to this, a previously anonymous user become a real contact, and thus a sales opportunity, and gets to the next stage of the funnel. At this stage, one of the most important processes of the conversion funnel begins — the identification of sales leads.

Sending newsletters and running mailing advertising campaigns () characteristic of this stage can be significantly improved by using tools that automate these processes. Our DMSender will help you here. It allows you to easily design and distribute cold mailing campaigns, advertising e-mails, and other content you create to promote your brand.

Stage 3 — Classifying leads

This is a very important stage that allows you to assess the attractiveness of leads. This is where lead scoring takes place, which is the process of assigning point values to specific leads. On this basis, each lead is assigned to one of three groups:

• hot leads,
• warm leads,
• cold leads.

This allows the sales department to know what actions to take in order to complete the sale — each of these groups has different characteristics and requires different actions.

Hot leads, i.e. persons most interested in the proposed offer, require immediate intervention and commencement of sales activities — the first sales messages can already be sent to such persons. It is for them that large “buy” buttons are placed in the most visible part of the website.

Warm leads are consumers who are interested in the offer, but who have not yet made a decision to buy, postponing it until later. In order for them to purchase the offered product, such a lead needs to be properly warmed up — a special strategy of subsequent engagement-building activities needs to be created for this group. In this case, companies usually rely on non-intrusive reminders about their offer and its uniqueness. However, one should be careful — after a few unsuccessful attempts, a warm lead may be completely lost.

Cold leads are people who are not interested in the offer at the moment but show potential for the future. In order to warm up leads from this group it will be necessary to establish a longer relationship — it is for them that newsletters, special offers and other content designed to arouse interest are most often created.

Examples of ways to warm up leads include:

personalizing your offer,
special shopping vouchers,
providing feedback from other customers who have made a purchase,
product reviews.

Stage 4 — Sales and post-sales activities

At the bottom of the funnel is the goal of the entire sales process — the purchase made by the customer. So if, as a result of your marketing efforts, you’ve managed to move the recipient to this level of the funnel — congratulations, you’ve succeeded. However, you must remember that the cooperation should not end at the moment of receiving the payment when the customer has passed the whole sales funnel to the very bottom. If you want customers to keep coming back to you, you need to continue to nurture the relationships you’ve created. By doing so, you will increase the likelihood that individuals will buy from you again and even encourage their friends to do so. Make sure the potential customer is happy with the transaction — be sure to ship quickly and take additional actions, such as:

• send a thank you note for making a purchase and invite them to transact again,
• Offer a discount code for future purchases,
• Send a special offer for a holiday or upcoming birthday,

Contact you when you know your customer is running low on stock.
Important: The steps described above are just a set of necessary actions. Under the short definition, there are a number of stages and the need to take many steps so that the implemented actions can bring the intended final result.

More to come..