Have you ever heard the word “funnel” in sales? Or has someone told you about this method but you have no idea what it is or how it applies?
To understand what it is for, we need to know what a sales funnel is.
“A sales funnel, or sales tunnel, is the way in which a company plans and establishes processes to get in contact with different users and thus reach a final goal, which can be customer conversion, achieving a registration, closing a sale, among others.”
(Valentina Giraldo, Sales Funnel, Feb 16/17)
It is a system designed to attract strangers, convert them into leads, and transform them into customers.
In short, the goal of the funnel is to:
- Acquire potential customers.
- Convert leads into buyers.
- Increase purchase frequency and/or average order value.
The sales funnel is a very important element in marketing, as it facilitates the creation of various processes needed to achieve sales objectives.
Regardless of the industry they operate in, all companies have a funnel to meet a goal — including acquiring potential customers. However, not all of them are aware of or able to fully identify their sales funnel and its phases.
This may be for two reasons: either they have no idea what a conversion funnel is, or they have not defined their purchasing processes. There are many ideas about what a sales process should look like or include, but the conversion funnel is basically a set of stages through which we filter users and leads. As mentioned, all companies have these processes in place, even when they are not aware of them.
It is called a sales funnel because it goes from the general (many users) to the specific — meaning qualified potential customers or leads with a buying intent.
And although it can be represented as a linear stage or a timeline, the truth is that a sales funnel typically takes the shape of an inverted triangle.
This gives a clearer picture of how the conversion process works — from having millions of users on a website to having some of them become customers and ultimately completing a purchase.
In recent years, the sales funnel has undergone a small transformation for many companies, especially with the rise of digital marketing and inbound marketing.
Why? Because even though the sales funnel is not new in the world of marketing and sales, the growth of technologies and platforms has completely changed the way users interact with a brand and its product.