Sales Funnel: What Is It and How to Apply It to Your Business Strategy?

When it comes to offering their products and services, many companies lack a clear and precise sales funnel to help them achieve their goals.

That’s why it’s so important to know this tool and how to implement it in your business successfully. Only then can you increase your sales, retain more customers, generate leads, and achieve the brand recognition you desire.

Are you ready to put it into practice? Then keep reading.

What is a sales funnel?

The sales funnel is a diagram that indicates each stage of the buying-selling process that a lead or potential consumer goes through until they become a customer.

In other words, this marketing tool establishes the various points of contact between the user and the company until achieving what is commonly called the sales closure.

Just like a funnel used in other industries, this representation is responsible for “filtering” out users who are not very interested in acquiring our product and service so that the sales team can focus only on those that are truly worthwhile.

As Neil Patel states on his blog:

“Losing customers sounds like a very bad thing, but it’s not. The truth is that not everyone in your funnel will become your customers. Only interested buyers will reach the end of the funnel.”

What is a sales funnel used for?

By having a conversion funnel in your company, you can teach your salespeople how to handle new and regular customers, understand the online sales process logically, and how to increase productivity in user service and support.

Likewise, you will learn to quantify your future sales and generate statistics and metrics about the number of agreements needed to achieve your goals.

What is the difference between a sales funnel and a marketing funnel?

The sales funnel is often confused with the marketing funnel because they have a similar conical structure.

However, the former focuses on negotiation, prospect conversion, and customer retention, while the latter only focuses on prospect attraction and classification.

How to create a sales funnel?

To create a conversion funnel, the following stages must be taken into account:

1. Contact: When the user is attracted to the company through various means such as content marketing, social media, advertising, among others.
2. Prospect or lead conversion: In this stage, it is defined whether it is worth investing in the prospect through the information obtained. This is the time to classify leads based on their behavior.
3. Interest and opportunity: After this classification, the company waits for the user to express their true need or interest.
4. Product or service qualification: Based on the user’s interest, the company determines which product or service to offer.
5. Closure: After conducting this marketing study, the sales process begins with the product or service offered. Likewise, the goal is to convert the lead or prospect into a customer.

The customer journey: another tool you should also consider

While users may have very peculiar purchasing processes, companies can establish certain parameters to help them improve their customer acquisition.

In this way, they can optimize their time and better manage their budget, especially if they have a CRM software where they can place customers and leads at different points in the sales funnel.

The customer journey or user funnel consists of the following stages:

1. Need and attention: When the customer begins to be interested in a certain topic but is not aware that it is actually an unsatisfied need.
2. Consider the problem: The user already knows they need something, and this is where they start looking for a product or service to satisfy that need. This is the moment when we must be most attentive because we need to be the first to offer that solution to the problem.
3. Decision-making: This is when the user has had their concerns resolved and is willing to make a purchase. If you have analyzed your customer journey correctly and implemented the right sales strategies, the prospect or lead will surely agree to purchase your product or service.

As you can see, using a conversion funnel in your company will not only help you get a better perspective on how your sales process operates but will also allow you to understand how you communicate with your customers.
Therefore, if you use a sales funnel correctly, you can monitor and implement various improvements that will help you achieve your business objectives and take your marketing strategy to the next level.