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What is a sales funnel and how to build it correctly

24 November 2021, Wednesday By M. Konwar
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The sales funnel is an important business parameter to optimize your marketing plan. If you do not take it into account, then you can stumble upon the fact that your ad will be watched by several thousand users, and only a few will make purchases.

How a sales funnel works and how it can help your business - I'll tell you in today's article.

What is a sales funnel

Let's imagine that we are scrolling through the feed on Facebook or any other social network and come across a post where it is written that the company has a 30% discount for 3 days. We were interested in the offer - we follow the link, go to the site and order a product or service. When we do something like this, it means that we are moving along the sales funnel.

The term “sales funnel” is used by marketers to describe the customer's journey from acquaintance with a product or service to purchase. At the "entrance" we have many people who are familiar with the brand and the product, but some of them scatter: one did not respond to the advertisement, another did not find the necessary thing in the online store, the third was not satisfied with the price, and so on. If you reflect this sequence of actions in a diagram, you get an inverted pyramid or funnel.

sales funnel

The sales funnel for a marketer is the first thing they should get to know. If you understand correctly how the buyer thinks, then you can easily adapt to him and launch an effective campaign.

An effective funnel helps:

  • attract new customers and convert them into buyers;
  • find out the total number of leads;
  • identify the weak points of the campaign;
  • track visitors who haven't converted;
  • predict the result of sales;
  • turn a client into a regular customer;
  • significantly reduce marketing costs.

It should also be borne in mind that in reality, buyers go to the purchase in a non-linear way - they can return to previous stages, lose their desire or delay paying for the goods.

Types and examples of sales funnels

To understand exactly how a sales funnel works, let's look at examples.

Example 1

Ads on Facebook ⇒ Landing page ⇒ Adding an item to the cart ⇒ Ordering and paying for goods

Or like this:

Ads on Facebook ⇒ Landing page ⇒ Adding a product to the cart ⇒ Canceling a purchase in the cart ⇒ Facebook remarketing ⇒ Landing page with a value proposition (promotion, discount) ⇒ Adding a product to the cart ⇒ Completing an order

This funnel is most often used when you need to quickly increase ROI and stimulate sales growth, or when new products are introduced to the market.

Example 2

For example, customers are attracted through useful content. The sales funnel looks like this:

Request in the search engine (without intent to purchase) ⇒ Resource page with useful content ⇒ Popup on the site ⇒ Subscribe to the blog ⇒ Even more useful content ⇒ Viewing the company's products on the website ⇒ Adding a product to the cart ⇒ Order

It is recommended to use such a funnel in cases where it is necessary to increase brand awareness and create a good relationship with the target audience.

It should also be said that by visualizing steps, you can optimize your marketing plan, while solving the problem of poor lead conversion by finding the stages at which people lose interest. But, besides this, it should be remembered that at each step it is necessary to analyze the traffic. It is important to consider who came from where, what kind of relationship the client has with your product.

Considering that the sales funnel ends with the execution of the target action, do not forget to analyze these indicators as well: the number of target actions completed, the number and quality of leads collected, the number of payments received, the average check of the online store, etc.

Example 3

And one more example - more illustrative, but more focused on offline business. Let's see how a sales funnel can work for a manager who makes cold calls. Its purpose is to make an appointment.

It all looks like this:

  1. The client is listed in the database - the manager found a suitable client and entered it into the CRM for a further call.
  2. The client is found - the manager made a call and found out the full name.
  3. Information received - the manager entered into a dialogue with the client, established contact with him and received information of interest to prepare a meeting or commercial proposal.
  4. A meeting is scheduled - the client has previously agreed to the meeting, but he needs to learn more about the company.
  5. The meeting is confirmed - the day before the scheduled meeting, the manager calls up the client and receives confirmation from him that the meeting will take place and he remembers it.
  6. Meeting held - meeting with the client has taken place.

Such a sales funnel is not strictly sequential, that is, the manager can immediately go from the first stage to the last one, if after the call the client immediately agreed to a meeting.

How to create an effective sales funnel

There is no magic plan for creating an effective sales funnel. However, there are some rules, adhering to which you can achieve the best result:

  1. Create a registration form on the site. The subscription form will help in the collection of personal data, such as name and contact information, as well as initiate a relationship with the target audience. Select the type of subscription form: built-in, floating, pop-up or fixed. Don't forget to add a lead magnet to encourage people to subscribe.
  2. Automate mailing. Organize on your resource an automated distribution of welcome letters for new subscribers, as well as weekly informational messages with promotions. Set up sending thank you emails to customers who have made a purchase and reminders to those who have not purchased anything yet.
  3. Use CRM. It allows you to conduct transactions with clients and track progress at each stage.
  4. Increase sales through cross-selling. Has the subscriber selected a product and is ready to close the deal? Offer him a more valuable counterpart. Has the customer already paid for the product? Tell him about other products or services from your company that will complement his purchase. Regularly notify subscribers of great deals through promotional emails or automated push notifications.
To work with requests, you can use such CRMs as:
  • AmoCRM is a system that allows you to create an automated sales funnel. It streamlines core processes such as sales analytics, email integration, and performance tracking through reports.
  • Bitrix24 is a unified platform for your projects, messages, tasks and contacts. In it, you can quickly process all orders, track the stages of each, form client bases and much more.

Mistakes in the sales funnel

Let's take a look at some points that will help you avoid common mistakes when building a sales funnel.

Shortening the shopping process

The more steps a client needs to take to order, the more likely it is that he will leave to look for an alternative on the sites of competitors. Therefore, you should make the whole buying process as simple as possible.

You also do not need to overdo it, since in the process of reducing the stages, you can remove unnecessary information. For example, if the product specifications or the description of the product return process are removed, then the customer may think that your product does not suit him and will go to a competitor.

Analysis of the usability of the site

Such analysis is necessary to optimize the usability of the site for visitors.

The reason for the low conversion may lie in the poor performance of the resource:

  • there is no shopping cart on the site;
  • a lot of intrusive ads;
  • access to the directory is difficult;
  • hard to find a CTA button.

If the buyer finds it difficult to navigate and interact with the site interface, then most likely he will leave empty-handed.

User segmentation

Dividing users into segments is necessary to display special offers for each individual segment. For example, for the “registered user” segment, information on additional discounts or special offers should be provided. On the other hand, for the “unregistered user” segment, information on the benefits of the product should be provided.

Conclusion

The sales funnel is a tricky marketing model, but if you understand it, the flow of customers will increase. In sales and promotion, you need to pay attention to details, since you can lose a potential buyer because of any little thing. Through the funnel, you can see the weak points of a business or ad campaign, which will allow you to move forward and get better.

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