Optimizing the sales process is a top priority for all sales teams.
Stagnating sales, cold leads, and missed follow-ups are just a few of the several challenges that a sales team has to face.
A powerful way to overcome these challenges is to build a sales funnel.
While you may have heard the term being thrown around quite a lot, you need to have a clear understanding of what is a sales funnel to be able to get actual profits from it.
To build a well-functioning sales funnel, you need to be aware of the prospect’s mindset and how they go about making the final decision.
In this blog, we uncover the best strategies that can be employed to build a successful sales funnel. Learn how you can optimize your funnel and use the best CRM software to maximize its potential.
What Is A Sales Funnel?
A sales funnel visually represents all the stages that a prospect has to pass through before converting into a customer.
In simple terms, it is a funnel-shaped structure that helps businesses capture, qualify and convert leads. A sales funnel is wide at the initial stages, where leads are captured and enter the sales cycle. It progressively narrows as the sales cycle progresses and more leads start dropping out.
The stages of the sales funnel remain broadly the same but can vary for businesses based on their sales cycle.
Why Do You Need a Sales Funnel?
96% of people visiting your website are not willing to make a purchase right away.
However, this doesn’t mean that they will not convert at all.
You need effective nurturing to drive these leads towards the final purchase. A well-defined sales process can make this possible by helping you deliver the right message to your audience at the right time.
A sales funnel provides you a clear picture of how the prospects move through your sales process. With tangible data of how many leads progress from one stage onto the next, you can utilize your time and resources more effectively.
Learning what is a sales funnel and how does it work can provide you with the following benefits:
Comprehensive Lead Nurturing
A sales funnel can help you identify what drives conversions for your business. You can nurture leads effectively and form long-lasting relationships that transform into profits for your enterprise. With a sales funnel, you can be better equipped to assist the prospect at every stage and nudge them towards conversion.
Manage Customer Journeys
To retain customers, you need to focus on their buying journey. A lead funnel system can make this easier for you by helping you understand what the leads expect from you at every stage of the sales cycle.
A sales funnel offers a clearly defined structure to your sales process. With a consistent plan in place, your sales representatives know how to approach the prospects at every stage.
Focus on the Best Deals
A sales funnel can help you distinguish high-value opportunities from leads that offer very little value.
Qualification of leads is essential for maximizing your conversion rate. With the sales funneling process, you can rule out leads that have fewer chances of conversion, allowing you to focus on hot leads.
Identify Opportunities for Improvement
You can get a clear and comprehensive picture of how leads move through your sales cycle with a simple sales funnel. This can help you address any gaps in your sales process that may be leading to lost opportunities.
A standardized sales funnel presents tremendous opportunities for business growth by helping you identify actions that work well for your sales and focusing more attention on these actions.
Setting realistic business goals is essential to keep your team motivated and focused. With a sales funnel, you can get a better estimate of how many deals you are likely to win and set upcoming sales goals accordingly.
Accurate sales and revenue forecasts can help you utilize your resources and time more efficiently.
Deliver the Right Message
Let’s approach this from the customer’s perspective.
Imagine you have encountered a challenge and are looking for products that can help you overcome it. At this stage, you require more information about the problem and its possible solutions. However, during the initial call with the sales representative, you find them trying to sell you the product right away without any information on how it falls in line with your requirements.
You are most likely to never return to that business.
This scenario is a perfect example of the damage that not delivering the right message at the right time can do.
A sales funnel can help your team offer valuable and relevant information to the audience based on their current stage.
By enabling you to discover actionable insights, a sales funnel can help you make accurate decisions for your business. You can identify actions that drive the most conversions and optimize your efforts accordingly.
A sales funnel also offers you the opportunity to find out which marketing channels generate the best leads, allowing you to allocate your marketing budget more judiciously.
Understanding the Sales Funnel Stages
As is evident from its definition, a sales funnel comprises multiple stages that cover all the steps a prospective customer must take before conversion.
Although the number and title of your sales funnel stages can vary depending on your sales cycle, the overall structure has to remain true to its fundamental form. The prospect finds your business, evaluates your offer, and then makes the final decision.
In its simplest form, a sales funnel must constitute of the following broad stages for it to be effective:
Regardless of your industry, the first step in your sales cycle is to make prospects aware of your existence.
Making your business discoverable for the right audience is essential to help you get access to promising prospects. You can accomplish this through various marketing channels, including advertising, cold emailing, surveys, social media, etc.
Prospective customers encountering certain challenges will be on the lookout for products that can address their needs. At this point, it is crucial to grasp their attention and direct it towards your business. Since the prospect is not ready to buy yet, the awareness stage should focus more on educating the prospect about what you do and how it can impact them. You can offer how-to videos, whitepapers, blogs, etc., informing the prospect about how their problems can be solved. This way, you can win their trust as an industry expert and get the upper hand when selling.
As the name suggests, this stage of the sales funnel is where the prospect demonstrates interest in your product or service.
Now that the prospects have a better understanding of their own problem and how you can help them, it’s time to initiate contact.
In the interest stage, the prospect is researching your product or service. They are also considering other alternatives. Therefore, you need to get in touch with them to provide detailed and relevant information to help them make an informed decision.
The next stage is consideration. At this point, the lead is evaluating all the information to reach a decision. The consideration stage provides you the opportunity to offer a unique proposition.
You need to let the prospect know about the value you can offer and what sets you apart from the competition. Sales calls and other methods of interactions such as seminars need to be a part of the consideration stage.
After the consideration stage, comes the final decision stage. The result of all the sales funnel steps comes down to the action stage. In this step of the sales process, the prospect decides whether they are going to make the purchase or not.
After the action stage, you can mark the deal as won or lost.
Even though the prospect has converted into a customer, your work here is far from done. Maintaining a post-purchase relationship can help you discover upselling opportunities. You are more likely to get better profits from retaining existing customers than acquiring new ones.
Customer retention is, therefore, a crucial part of any enterprise’s success. Offer reliable customer support and seek feedback from the customers. It is important to keep the customers engaged to ensure that you do not lose them to competitors.
Clearly defined stages of a sales funnel can help you deliver the most appropriate content to the prospects that can nudge them in the right direction. For instance, a lead that is at the top of the funnel and not yet ready to make the purchase can benefit from educational resources about the product and the industry. A lead in the later stages would be more interested in how your business can impact them.
How to Build a Sales Funnel
Now that you get what a sales funnel is, it’s time to move on to the more important question-
How to build one for your business?
Know Your Ideal Customer
Buyer personas are critical when it comes to building a sales funnel.
In order to sell more, you need to know who you are selling to.
Who is your ideal customer?
What are they looking for?
These are a few of the several questions you need to ask yourself before building your sales funnel.
Identify Their Pain Points
Creating a sales funnel requires you to be aware of the challenges that your prospects face. Analyzing the audience’s behavior, preferences, and pain points can help you build the most effective sales funnel. It can help you identify which stages to include and how to manage the funnel effectively.
You have to attract the right people to your business for the sales funnel to produce reliable outcomes. There are several ways to attract traffic to your business. Ensure you pay attention to all of these, including SEO, PPC, social media, cold emailing, etc.
Create and optimize landing pages to capture promising leads that can be fed into your sales funnel. These leads then have to be qualified before they are assigned to sales representatives.
Deliver a Consistent Message
Offer value to the audience and help them realize how your business can address their needs. You need to come up with the right message to be relayed across to the audience through multiple channels. Make sure that every stage of your funnel aligns with your business goals and remains consistent with your value proposition.
Create Content for Individual Stages
Every stage of the buyer’s journey has to be customized and tailored to meet customer expectations at that point in time. A one-size-fits-all approach wouldn’t work here. Create engaging and informative content for every stage of your sales funnel. Craft drip campaigns that can help you get in touch with the prospect at the most favorable time.
Nurture your leads effectively by providing relevant assistance and content at every stage of the sales funnel. Reach out to them with personalized and informative content at the right time. Actively engaging with the leads can help you ensure that they do not fall through the cracks. You also need to provide a clear CTA for every stage.
The sales funnel has to be smooth and efficient for you to see actual profits from it. Make sure that the prospects do not encounter any difficulties or delays during the sales cycle. Stay in touch with the prospects even after the conversion. This can help you retain more customers, contributing to an enhancement in your brand’s position and credibility.
How to Make Your Sales Funnel Work
A formally defined sales process can help your sales team achieve better productivity, leading to an increase in your ROI.
However, to see these results, you need to build and manage your sales funnel optimally.
Leaks or any inconsistencies in your sales funnel can end up in lost opportunities and profits.
Now, who would want that?
To avoid this, you need to evaluate your sales funnel and optimize it for effectiveness. Here are some of the best practices that can help you achieve this-
Adapt It According to Your Sales Cycle
Your sales funnel would be of no use if it doesn’t align with your sales process.
Contact your sales team to identify the best ways to modify the sales funnel to fit your business needs.
Pay Attention to Existing Customers
You need to continue making efforts to improve your customer relationships even after the purchase. Engaging with existing customers can help you retain them. Seek their feedback, offer discounts, and ensure that you continue to make efforts to stay in touch.
Qualify and Manage Leads
Keep track of the type of leads that are entering your sales funnel.
There are several questions you need to ask yourself-
Do your sales and marketing teams agree upon the definition of a good lead?
Are you scoring the leads?
How effectively are you managing the leads?
Qualification and management of leads can go a long way in improving the efficiency of your sales funnel.
Track and Use Data
When it comes to a sales funnel, there are several things that you need to keep an eye on. One of the most significant out of these is the conversion rate. To measure this, compare the number of deals won against the total number of leads available. Tracking and using relevant data can help you maximize the potential of your sales funnel by giving you actionable insights to work with.
Test Marketing Efforts
You need to test and refine supporting marketing content to be valuable and engaging. Monitor how the audience interacts with the information that you share with them. This could include email open or click rates, how many people sign up for your newsletters etc. This information can help you identify what gets you the most attention and use more of that in your marketing strategy.
Automate Lead Movement
You need to ensure that the leads keep moving through the funnel and do not get stuck at any stage. For this, you need to follow up with them at the right time.
Automation of the sales funnel can help you move prospects along with ease. Choose a tool that prevents your leads from going cold with regular reminders and automated follow-ups.
How to Optimize Your Sales Funnel for Better Conversion?
You would be surprised to know that over 79% of marketing leads don’t make it to the conversion stage.
Only with a well-laid-out sales strategy can you ensure that most of your leads convert into customers. An optimized and well-functioning funnel is a critical component of this strategy.
It is crucial to eliminate any guesswork and fine-tune your sales funnel to the best of your ability.
Here are the best practices for sales funnel management that can help you optimize your funnel for profitability and efficiency:
Use a CRM
Integration of the right technology can significantly improve the performance of your sales funnel.
CRM tools are highly effective for managing sales funnels. They provide sales teams the opportunity to track and store relevant customer data for personalized interactions. With an efficient CRM tool, you can follow up with leads at the right time and prevent deals from falling through the cracks.
You can also benefit from the automation, reporting, and email integration features of a CRM tool. Additionally, it can help you enhance your team’s productivity with activity tracking and automated reminders.
Set Relevant Metrics
The most effective way of optimizing the sales funnel’s performance is to set and track relevant metrics. This can help you ensure that the sales funnel is healthy and functional. If you are dissatisfied with the outcomes, you can make the necessary adjustments to improve the funnel’s performance.
You need to track how many prospects move through every stage of your sales funnel. Other metrics that you should track include the number of deals you work with, your customer retention levels, average deal size, and your win rate.
Regular Review and Testing
Review your sales funnel routinely to monitor its performance and identify areas for improvement. You also need to track how the audience responds to your emails, landing pages, and other marketing campaigns.
Pay attention to what fares well with your target audience and use this information to tweak your sales funnel strategy. Review the performance of your sales funnel at individual stages to get a deeper understanding of what must be changed to get better results.
This is what a lot of sales teams seem to get wrong.
Not every lead in your sales funnel is at the same stage. Additionally, not everyone has the same expectations and requirements.
Offering a lead that has just entered the sales funnel the same content as that provided to those at the bottom of the funnel will damage your profits.
To get the proper traction, you need to offer personalized content based on the current position of the sales leads. Provide valuable information associated with the stage they are currently in. This can help avoid any frustration from the customer’s end and help you drive more leads toward conversion.
You need to keep an eye on every stage of your sales funnel to identify any possible roadblocks.
Take time to find the stage where you lose the most customers and identify what is causing this. Indicators of issues with your sales funnel include the sales cycle being longer than average, most of your leads going cold, or a considerable drop in the conversion rate. If you notice such problems, you need to revisit your sales funnel and make the required changes.
Make a note of actions that drive the most conversions and try to identify what your sales cycle is currently missing out on. Track your sales efficiently and address any hurdle in the sales process immediately.
A study revealed that 51% of people believe that a timely response from the sales
representatives can make up a satisfactory experience.
But how do you ensure that you reach out to the leads at the right time?
This can be simply done with automation.
With an automated sales funnel, you eliminate the risk of missing out on important opportunities. Relevant and personalized content can be shared with prospects automatically based on their actions.
Sales Funnel vs. Sales Pipeline
Sales funnel and sales pipeline, although used interchangeably by most businesses, are far from being the same thing.
Sales funnel refers to the pre-defined stages of your sales cycle, while a sales pipeline is a dynamic representation of every available opportunity.
Both sales pipeline and sales funnel, represent different types of data and should be treated as separate entities. A sales funnel is more customer-oriented than a sales pipeline. The sales funnel can help you identify all the stages that the lead has to go through before the final purchase. On the other hand, the sales pipeline carries much more utility for your team since it helps them keep track of every lead and provides an overview of the upcoming sales activities needed for conversion.
Another important point of difference between them is that the pipeline only constitutes leads that will make the purchase. On the other hand, the sales funnel has both prospects as well as existing customers.
Best Sales Funnel Examples
Let’s look at some businesses that have aced the sales funnel and have witnessed a considerable impact on their sales.
Groupon has one of the best sales funnels that helps it reach a worldwide audience. It has a variety of channels to acquire leads. These primarily include ads, affiliate marketing, direct mails, etc.
Let’s look at the features of the sales funnel model of Groupon in more detail:
- One thing that has remained a constant part of Groupon’s strategy over the years is pop-ups. Right from the first visit to the Groupon website, visitors are prompted to sign up for emails with a pop-up. These pop-ups offer valuable discounts and other incentives to encourage prospects to sign up.
- Those who opt-in for the emails get personalized follow-ups that encourage them to revisit the website. Since these emails are tailored for the target audience, they have a higher chance of bringing in traffic.
- Another thing that works well for Groupon is the clearly defined CTA for every deal.
Groupon’s sales funnel is relatively straightforward and clean. The customers can only buy in the deal by signing up with their email address.
The sales funnel broadly consists of the awareness and homepage stages. It makes efficient use of email marketing to drive customer retention.
Zendesk is a leading name in the technology industry, offering multiple products that help people work more efficiently.
Let’s see how Zendesk sales funnel process helps it get access to such a wide consumer base:
- First-time visitors of the Zendesk website are prompted to fill out details such as their name, email address, and the product they are interested in.
- Based on this information, they can access personalized video demos for tools similar to the one requested by the visitor.
- The demos help the prospects determine if investing in the tool would be the right choice for them.
The sales funnel of Zendesk consists of the awareness stage where the attention of the prospects is grabbed through blogs, targeted ads, etc. This is followed by the interest stage, where personalized video demos are offered. The consideration and action stages of the sales funnel follow this, after which the opportunity is marked as won or lost.
There are several other successful sales funnels that can work well as a reference for your business. However, keep in mind that every company has its own sales process and requires different stages in the sales funnel.
Although finding the most optimal sales funnel for your business will require time and effort, the rewards will be exceptional.
Build Your Sales Funnel for Sales Revenue Growth!
If you do not have a standardized process of how to move forward with your leads, you‘ll end up losing them to competitors.
With several alternatives readily accessible, the prospects expect you to deliver top-notch experiences for them to choose your business.
This is why you must know what is a sales funnel and employ the best practices to build and manage it.
Even though creating a successful sales funnel requires considerable time and effort, it can be a highly profitable investment for your business.
Use an efficient CRM tool such as BIGContacts for managing your sales funnel. This can help you automate your workflow, track the progress of team members and gain customer loyalty.
1. How do you create a sales funnel?
To create a sales funnel for your business, you need to know your buyer’s persona, as well as your sales process in great detail. This can help you establish a funnel that is compatible with your sales cycle and helps your team convert more leads. Include supporting marketing content in your funnel that can keep the prospects engaged and well-informed. Lastly, review and refine the funnel routinely to keep it functional.
2. Do you really need a sales funnel?
A sales funnel can play a substantial role in boosting your sales growth. A systematic and strategic approach to sales can prove to be instrumental in keeping things organized and aligned with your business objectives. It can help you achieve better sales productivity and, consequently, lead to an improvement in your revenue. With a well-designed sales funnel, you can gauge and meet customer expectations with ease.
3. How can BIGcontacts help your sales funnel?
BIGContacts CRM can help you optimize your sales funnel and enable you to focus on the right deals to drive profits for your business. By providing access to all customer data and activities in one place, BIGContacts can help you get better control over your business operations. It enables you to track and store relevant details for individual contacts that can help you personalize your interactions to a greater extent. You can use its reporting and analytics capabilities to monitor the performance of your sales funnel.