The sales funnel is a strategy that seeks to represent the stages through which a consumer goes through to make the purchase of a product or service. Thus, it helps guide the marketing and sales teams to act in the most appropriate way with each client, depending on the stage they are in.
We know that, when buying a product or hiring a service, each person takes a different path towards the final decision. In addition purchase day it is not linear. However, there are consumption patterns yes, and generally speaking, most consumers go through some steps and exhibits certain behaviors until making a purchase.
In this context, the sales funnel is used to represent these steps and help companies optimize their processes and be more successful in sales.
In this article, you will understand everything about the sales funnel, the main steps, know the benefits and learn how it can help your business. Check out!
- What is the sales funnel?
- Sales funnel stages
- How does the sales funnel work?
- Sales funnel in e-commerce: how it works in practice
- Why is it important to use the sales funnel?
- 5 benefits of the sales funnel
- Conclusion
What is the sales funnel?
The sales funnel is a strategy that seeks represent the steps that a consumer goes through in the purchase journey to make the purchase of a product or service.
As much as the purchase journey is not homogeneous and linear and each person acts in a different way, there are many behaviors in common – as we have already highlighted.
Therefore, the sales funnel is widely used in digital marketing industry and, mainly, in inbound marketing to assist and direct the teams of marketing and sales, indicating which are the best actions; what communication to use; and what content and offers to provide to consumers at each stage.
When creating your company funnel, you can identify which actions or touchpoints are contributing to the sales and what can be added or improved in the process.
Sales funnel stages
The sales funnel consists of 3 major stages: top, middle and bottom of the funnel. Each of these steps indicates the maturity level of a consumer in relation to the purchase.
Understand the steps to follow and how they relate to your customers' purchase journey.
1) Top of the funnel: learning and discovery
2) Middle of the funnel: problem recognition and solution consideration
3) Bottom of the funnel: purchase decision
1) Top of the funnel: learning and discovery
The top of the funnel is the first step and where it all begins. It is the first opportunity to approach a consumer who has never even thought about buying your products or solutions.
Therefore, at this moment, we say that he is in learning and discovery phase in the purchase journey. That's when he know something new and often realizes they have a need or problem, but still doesn't have a deep understanding of it.
Trying to sell him something at that moment will hardly bring any results and can even make him feel pressured and uncomfortable.
2) Middle of the funnel: problem recognition and solution consideration
In the middle of the funnel, the customer already knows they have a problem and is looking for all kinds of solutions to solve it. He also knows that the best option might be to make a purchase, but he's not sure yet, so he's open to other alternatives.
If approached for a sale, he may stop and listen to what you have to say, but the chances of a purchase are not the best.
3) Bottom of the funnel: purchase decision
The third and final stage is the bottom of the funnel, stage in which the consumer is more mature and ready to be approached, that's why it's called by the marketing and sales teams opportunity.
He already knows what his problem is and wants to solve it. He has already seen several alternatives and knows which is the best option. It only remains to decide which company he will close the deal with. Therefore, it is the phase of evaluations and negotiations. It's time for the long-awaited buying decision and the ideal time to approach him and sell your product to him.
But, for that, it is important to present all the differentials of what you are offering and what are the advantages in relation to the competitor. These elements will be decisive for the decision-making.
After this last step, if the consumer really becomes your customer, it is important to offer a good after-sales service and invest in retention strategies e Customer Loyalty.
How does the sales funnel work?
The sales funnel is so named because works exactly like the objectBut what passes for it are consumers. That is, at the top, there is more space and a lot of people enter. But halfway through, that amount drops dramatically and, in the end, few arrive.
Thinking in the context of any company, this means that, at first you will attract a lot of people, a lot of people wanting to know and know about something you shared or divulged. Whether on social networks, the official website, the virtual store or any other channel.
More not everyone will be ready to actually become customers; some will come closer to it; and only one small part will actually close the deal like you.
The funnel serves as a guide
The fact that few reach the end is not exactly bad, after all, the funnel serves precisely to guide and help you to know which people to invest your efforts in and also which are the best efforts in each situation.
And if you work well with your prospects at each stage of the funnel, quality of those who reach the end will be much higher and the chances of purchase as well.
In addition, you can make an effort so that the quantity becomes quality: that is, if many consumers enter unprepared for the purchase, but you know how to educate and prepare them by showing the value of your product, the tendency is for them to walk through the funnel and reach the end. So you turn quantity into quality too.
Therefore, the biggest tip regarding this strategy is: at each stage of the funnel, you must offer something so that the customer proceeds to the next step.
Sales funnel in e-commerce: how it works in practice
O e-commerce sales funnel it works very similarly to what happens in other businesses, that is, it also has 3 stages: top, middle and bottom.
It is also necessary to recognize which stage each consumer is in, in order to communicate in the best way and try to make them move to the next stage.
But, so you can see it better, check out the examples in practice of how a consumer can go through each of the stages until the moment of purchase in e-commerce.
Hopper top
This is the time to learning and discovery, then the consumer is very far from the purchase. An example in ecommerce would be a person who is just looking for a cooking recipe on the internet.
Let's imagine that this person is named Victoria. So she goes to Google, types in the name of the recipe, and finds it in a blog post for a store that sells kitchen utensils.
See that the soul of this business is the sale of kitchen items, but what attracted Vitória was not any of these products, but the recipe they shared — the informative content.
But, as it is necessary to move the person to the next step, the writer of this blog mentioned, in the recipe, the need to use one type of pan or another.
Realize what happened: Vitória was looking for an apprenticeship, the recipe. She found what she wanted, but saw that, to put it into practice, she will need a specific pan, which can be one way or another.
At this moment, she recognized that she has a problem, Ou seja, need a pan; and just passed from one stage to another.
middle of funnel
Now that Vitória already knows she needs a pan, we can say that she is already in the problem recognition e in search of solutions.
So, at that moment, she will think about alternatives, like asking her acquaintances and seeing if anyone has one of these pans to lend her. And she will also consider purchasing one of the pans mentioned in the recipe.
So, the next step will be to research information about the pans, to see if it is really worth spending some money on it and which of the two best suits your needs.
If the company where she accessed the recipe has a good strategy focused on the sales funnel, it will probably have content talking about these two types of pots. The contents can be on the blog, in video format on YouTube or even in a more complete material available for download.
Some examples of content would be: “Pan A x Pan B: which is the best?”, “How much does Pan A cost and what is it for?” and “Panela B: 10 amazing recipes to make at home”.
At this stage, Vitória goes in search of knowledge about these types of pan and if the first company cannot reach it at this stage, it can find what it is looking for in the competitor.
After having learned all about pans, their advantages, what recipes you can make, among other things, she will probably have decided to buy one of the two types, so advanced one more step.
funnel bottom
Vitória is in the last stage, in the buying decision. She already knows which pan she wants to buy, but now she needs to find out which sites sell this product, what is the best price and which are the best conditions for delivery e payment.
If she learned and informed herself in the previous steps with the same company, she probably already knows that it is one of the brands who can make this purchase and maybe she has already developed an empathy for the brand and even trust.
All this will make the purchase process much easier. But of course there are many other factors, such as: photo quality and product descriptions in our CATALOGUE; to shopping experience in the online store; customization; payment facilities; freight etc.
Read also: User experience: what it is, how to do it and how to optimize.
Why is it important to use the sales funnel?
Using the sales funnel is very important, because with it, it is possible to understand which materials your and touch points with your company — or even with the competitor — the consumer goes to buy your product or similar competitive product.
Here are some insights you can get when creating and analyzing your business's sales funnel:
- Understand whether investments are generating results
- Recognize the main points for improvement
- Identify which channels and actions bring the most return
Read also: How to increase sales to have agility in the operation of your company?
5 benefits of the sales funnel
- Greater productivity and efficiency
- Time and work optimization
- Earnings predictability
- Better use of sales opportunities
- Insights for product development
Greater productivity and efficiency
When you use the sales funnel in your company and analyze it frequently, it is possible to understand what is contributing or not for the consumer to move from one stage to another.
This makes it possible to process optimization, through:
- greater clarification of the purchase process;
- easier to perceive the right moment and offers for each customer;
- more assertiveness to close sales.
Time and work optimization
With the funnel, it is possible to better visualize the marketing and sales steps that need to be improved and, thus, it is possible to optimize the processes, as we mentioned earlier.
As a consequence of this, there is also an optimization of the time and work of the teams, which can improve what is not working and continue with focus on what is generating good results.
Earnings predictability
The sales funnel also helps predict earnings, because, when analyzing it, you begin to understand that if an X number of customers enter the top of your funnel, more or less a Y number will reach the middle and an amount Z will actually go to the last stage, being able to finish the purchase.
Better use of sales opportunities
By using the funnel, you will not focus on those consumers who are not yet ready, but you also do not need to discard them from your email base, for example.
By identifying which stage of the funnel they are in, it is possible to nourish them with appropriate materials and content, encouraging progress in the stages until the moment they are ready to finally buy from you and become customers.
Insights for product development
Analyzing the funnel and consumer behavior at each stage can generate insights even for the product team, helping to understand if it is necessary to develop or make new products available and if something is missing in the solution or platform used.
Conclusion
In this content, you understood what a sales funnel is, got to know its stages, how it works, its importance and the 5 main benefits it generates.
To start using it, list all the points of contact that a customer may have with your company and then try to identify which stage each one fits into. This way, you can understand the initial improvements you can make at each point, encouraging the customer to move on to the next step. And remember: this analysis should be constant and the funnel should be improved whenever possible.
One thing is for sure, when used well, the sales funnel is an excellent hardware to help boost your business efficiently.
And, if you have an e-commerce, another way to leverage sales is to invest in customization and in a good shopping experience.
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