What is a sales funnel?
The journey of a customer from awareness to action(purchase) of a good or service is a sales funnel. The sales funnel also called a revenue funnel or a sales process.
Most purchases made by a customer are to fill a need. At times the need is not in existence at the time the customer becomes aware of the product or service. This is where sales strategy comes into play at the time of awareness since the product or service must be retained in the mind of the customer until the need actually arises.
Depending upon the detail of the sales process, the sales funnel is divided into seven phases including:
Awareness Phase – in which prospective customers gain awareness of the product.
Interest Phase – customers show interest by conducting product research in a product.
Evaluation Phase – in which prospects or prospect clients examine competitors’ solutions as they edge towards making a final decision toward a purchase.
Decision Phase – In which a final decision is reached and negotiation begins.
The Evaluation and Decision phases are more prominent in a B2B sales process
Purchase Phase –This is the grand finale of the funnel and usually takes place at a point of sale.
Reevaluation Phase – in B2B sales it’s common for the sales process to involve contracts which need renewal. Once a customer becomes familiar with a specific service provider or product, there is a tendency for inertia to develop, once both parties of the contract have settled into a comfort zone of sorts. As the contract draws to a close, a customer will enter a reevaluation phase during which a decision will be taken as to the worth of the service provided and whether or not to renew the contract.
Repurchase Phase – That phase during which a client repurchases a product.
Sales managers put into use sales strategies and tools, all intended to bring about the optimization of each stage of their sales process.
The sales funnel might be a little different for service in that the actual use of the service becomes a phase of the revenue funnel.
How does it apply to businesses?
The sales funnel for an individual customer might differ and be simpler than that for a business making a purchase. For instance, the decision phase might not be elaborate and last just a few minutes, or even shorter for impulse buys. Whereas the decision phase might last for months and involve extensive research into the competitors’ products and price points before a decision can be made.
Implementation of sales strategy with respect to the Sales Funnel
The Sales strategy in earlier days entailed extensive advertising and retail strategy at the point of sale with displays and special offers. In today’s day and age, the sales funnel strategy needs not only to encompass the real world, but have an online presence too.
The Sales funnel enables a deep understanding of the stages of the sales process and assists the crafting of a comprehensive digital sales strategy. Customers today are highly tuned to various channels of social media, It is therefore of extreme importance to include the avenue in any sales strategy to be implemented. The level of interest of potential customer can be judged by his or her social media activity, based on the sites visited and interactions with pages. A social media matrix can be crafted to identify the customers who have the highest “fit” with the product on offer and those who are most likely to purchase it.
A Social media matrix based on the Sales Funnel would look something like this:
The sales strategy employed by a business to influence the customer would be based on the area of the matrix the customer falls in.
The ideal segment of the matrix to target would be the “High Interest, High Fit” sector. These are people who are interested in the product and it would be of great value to them. In this case only a little nudge is needed by the branding campaigns to move the customer to the purchase stage of the sales funnel.
Another sector to target is the “Low Interest, High Fit” sector. These are people who are not currently interested in the product, but it fits their lifestyle. Engagement campaigns can increase the interest levels of these customers.
As potential clients move through the sales funnel, the ideal sales strategy directs specifically targeted information at them. The branding message is personalized to a greater extent as the client moves through the sales funnel.
The following digital tools can all be targeted to potential leads based on where they are in the sales funnel:
- Call-to-actions (CTAs): Old styled CTAs have become ineffective and even boring in the minds of potential customers. Consumers can easily find what they need to know by doing their own research. Digital sales strategy studies show that a majority of shoppers conduct online research before buying a product. Instead of the same old CTAs, more inviting ones like “sign up for our newsletter” yield more positive responses from potential leads.
- Lead magnets
- Landing pages
All of these tools need to be carefully crafted to draw in the potential lead and give him or her the relevant information to make a well-informed decision.
The Sales strategy can address individual barriers to making the purchase like cost barriers, quality, mode of utilization and many others. The key to a successful sales strategy is forging a relationship with the customer, to develop some brand loyalty. The goal is for the customer to make further purchases and get converted into an ambassador of the brand to others in both their offline and social media circles.