Sales Funnel – A sales path that your customers go through before making a purchase
A Sales Funnel the Backbone/ Structure Every Business Needs
Every business model works around sales funnel. Some of us may have come across the term when using online marketing strategies. A sales funnel is usually associated with online sales. However, it has been there since the dawn of business, people may have not realized it then. Even the smallest of businesses rely on a sales funnel. You want to know how?
What is a Sales Funnel?
A sales funnel defines a sales path that your customers go through before making a purchase. It is called a sales Funnel because not everyone who is aware of your products or services ends up making a purchase.
Think about the physical funnel you have used in a science lab or elsewhere. The surface is wide to capture most of the liquid you are funneling into a container. In a sales funnel, this section represents creating awareness. The more awareness you create the more your sales increase. Let us break down the phases of a sales funnel in business for you to understand how the sales funnel works and how it can help you.
Phases of a Sales Funnel
A sales funnel has four major phases. The performance of your business depends on how well you optimize these steps. Note that you will need to rely on a different approach to optimize each stage of your funnel. The stages include awareness, interest, decision and action.
a. Awareness
Have you ever gone window shopping? Why do you window shop? It is to get information and be aware of a certain product. As a business entity, this is a phase of courtship between you and your customers. You need to capture your customers’ attention and make them aware of what you are selling.
How can you create awareness for your business?
· Open and run a social media account for your business
· Create a website for your business. This will make your business information available via Google search.
· Tell your friends about it. Your friends may not necessarily make a purchase but they will help you market.
Approach to use in this phase:
Marketing. Make your business and services known. At this stage, the customer may be simply gathering information. You need to let them know you are available. In some cases, when the time and place is just right, you can make a sale in this stage.
b. Interest
Your customer at this stage is doing research, making comparisons and considering options. The customer is looking for content that may be useful and may push them towards a purchase. One time I was purchasing an electric cable to draw electricity from a source a few meters away. I had no idea which cables to buy so I visited a local electronics shop. The sales person told me about the different types of cables. He even told me about the types that were out of stock and advised me to look for to look for them first. I ended up buying the required cable from another shop BUT I went back to but other electrical appliances from the first shop. Why?
You need to give your customers information first before pushing them towards your products. They will then know that you have their best interest at heart and you will have generated leads as they will come back later or refer you to their friends.
Approach to use in this phase:
Offer your customers the help they need to make an informed decision. They will take you for the expert you are and they will trust in your products.
c. Decision
Your customer is now ready to decide on what to buy based on the information you have presented. You may be among the options the customer has in mind.
Approach to use in this phase:
Bid with your best offer. You need to make it irresistible compared to your competitors’ offers. You may take advantage of discounts, bonus products (e.g. buy one get one free) or free shipping. Ensure you offer is suitable to the customer and to your profit margin.
d. Action
The customer makes a purchase in this stage. You should not consider this to be the end of the customer journey because you have more products to sell. Your ultimate goals in business are sales boost and customer retention.
Approach to use in this phase:
Be grateful to your customer for making a purchase, offer free shipping if possible, ask for feedback, especially if you have an online store, offer tech support, warranties and any other form of customer support that is applicable to your business.
Types of Sales Funnels
Sales funnels exist in both physical and digital form. Your sales funnel is in physical form if you use traditional methods of sales and marketing. You have a digital sales funnel if you have an online store and use digital marketing strategies. Each of the funnels reflect the phases we discussed above. Let’s analyze the types of sales funnels:
a. A Physical sales funnel
Let’s say you run a clothing shop.
· You will create billboards, flyers, tell your friends about it and display the apparel by the sidewalk. You are creating awareness.
· A potential customer will learn about your shop and walk in to take a look.
· You will discuss the various clothes available and the customer will tell you what they like and their clothing style. the customer has interest.
· Your customer gets interest in a specific apparel and you generate an offer. The customer has made a decision.
· The customer makes a purchase and will discuss where they got it with friends and family at home. The customer has taken action.
b. A digital Sales funnel.
Let’s say you have an online clothing store.
· You will create ads and post photos on social media.
· People see or share your posts. They will research on the apparel you are selling and compare material and prices.
· The customer looks up your store and registers with their email.
· They make a purchase which is shipped to them.
· You get to use their email to make follow-ups and ask for feedback. They could discuss it with friends and family and refer them to your store.
Final Thoughts
You need to optimize your sales funnel using the various approaches we have recommended at each phase. Sales funnel optimization helps you generate more leads, retain customers and stay ahead of your competition.
It takes time to build a successful funnel but shorter time if you know how to optimize your processes. Remember: create awareness as much as possible, always offer your customers information first before offering products, try and make the best offer and practice customer retention approaches.
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