What is a sales funnel? - How to make money

No business in the context of modernity can do without marketing. Competition has increased and consumers are more demanding. Now every entrepreneur should know at least something about what is a sales funnelpersonal branding and objection handling.

In the article we will talk about one of the main tools of any entrepreneur and marketer.

Any sale is a certain sequence of actions by the buyer and seller. These actions lead to a sale if the system is set up correctly, or the business owner losing a customer if the tool is useless.

Therefore, a competent sales system can, first of all, enrich an entrepreneur. On the other hand, their absence will lead to a senseless waste of the budget and bankruptcy. This can be avoided by analyzing the funnel results and adjusting your actions.

What is a sales funnel in simple words?

The term “sales funnel” was proposed in 1898 by the American publicist Elias St. Elmo Lewis. The bottom line is to create a consumer-facing marketing model. In other words, it's something that illustrates a potential consumer's path to buy something.

Most importantly, if you understand the customer's needs and steps, you can control their behavior. This tool allows you to control the business, and those who don't have it tend to trust the quality of the product and luck.

The funnel itself starts with the ad that attracted the person and ends with paying for the offer. The standard stages of a sales funnel are customer ignorance, awareness, interest, desire, and purchase.

This model of consumer behavior was called AIDA. Such a scheme appeared a long time ago: in 1989, in 1989. It was created by the same Elias Lewis. AIDA is an abbreviation meaning:

1. Attention – the attention of a potential customer;
2. Interest – the appearance of a potential buyer's interest in the offer;
3. Desire – the appearance of your desire to buy a product or service;
4. Action – the purchase of a product or service by a person.

In practice, people can go back to previous steps, skip them, miss the opportunity to pay for the goods, etc. Despite the non-linearity of consumer behavior, the sales funnel still works effectively. It allows you to find problematic issues and fix them.

Sales funnel functions and examples

We found out what a sales funnel is and explained it in simple terms. Now let's take a look at the main functions of funnels.

The main function of a sales funnel is to build a customer route. So the helper functions follow from this:

First, monitor employee performance. Among them are sales managers, SMM specialists, and so on. Knowing all the stages of sales, it will be much easier to analyze the effectiveness of the different actions.

Second, the analysis of the effectiveness of the implemented tools. For example, if in the first phase most people gave up, and in the second, on the contrary, they went further, it is the first phase that needs to be corrected.

In addition, the sales funnel allows you to build a clear sales algorithm and make predictions.

Sales funnel example

Imagine you have an offline store. You've compiled a sales funnel that looks like this.

1. informing. Salespeople cold call you, you place ads outdoors, and you run ads online.
2. Benefits. Someone starts to be interested in your offer. Managers talk about product benefits, reviews and promotions.
3. Commercial offer. Take action. Some potential buyers who are still in doubt are given more favorable terms for them.
4. Agreement and billing
5. Action, that is, payment for the purchase.

Imagine that with the help of publicity and the work of a manager, 1000 people discovered you. As a result, 500 of them were interested in the proposal and received more detailed information about the benefits. Advantages, however, only interested 150 of them. 130 people accepted the terms of the commercial offer and as a result, only 110 people reached the payment stage.

We draw conclusions: most people were eliminated in the early stages. It means the advertising forms are inefficient, the benefits are not good enough. So, these are the steps that need to be worked on.

Another case: the photographer wanted to win new clients. He created a lead magnet, that is, a cheap offer to attract potential buyers. Then he launched social media ads.

First of all, he made small footage from 500 rubles for 30 people, spending a total of 2 working days and earning 15,000 rubles. But that is not all! Second, of those 30 people, nearly half ordered further shootings of him. For example, wedding, reportage, etc., which cost much more.

How to build a sales funnel?

First, the principle of creation is universal and suitable for any business. As a result, only the content will be different. You can build a sales funnel either in excel or using Google spreadsheets, special services like MANGO OFFICE or through any CRM.

Define channels to attract a customer, for each of them there will be a separate funnel. These might include social media, outdoor advertising, cold calling, a website, and so on.

Imagine a portrait of your target audience, think about how you are going to close their pain. Know all the benefits of your product or service. Create a sales funnel – this is done in 6 steps.

1. Prepare an offer that draws attention to you

Of course, it should reflect competitive advantages and benefits. Give arguments that help get rid of consumer fears. If, for example, people are afraid of quality, tell us about certificates, industry experience.

Use triggers like “want to make more money? Learn a new profession…”. Be relevant: “Want to lose weight in the summer? Come to our sports club at competitive prices”

2. Define promotion channels

Here are some examples: email newsletters, automated webinars, SMS mailing lists, TV advertising. Pay attention to where your audience spends the most time and the specifics of your products or services.

It can also be radio advertising, pamphlets, leaflets. Also, you can try advertising through a blog, guest posts, at fairs and other events.

3. Invent a way to interest

Tell us about the quality of services, the possibility of fast delivery, installments, discounts, etc. If you offer a person to buy a suitcase profitably, they will come out to compare with competitors. If you say that just this week leather bags are at the price of faux leather, then the probability of a sale will increase.

4. Dealing with objections

You are rarely able to sell right away, and the more specific the product, the more questions the customer will have. The most popular objections are: “you are expensive”, “I will think about it”, “not sure if you have a quality product”, etc. There are obvious objections that are easier to deal with. In addition, there are hidden objections that require fruitful customer dialogue to identify. Scripts to resolve some objections are available on the Internet.

5. Close the deal

Here we are thinking about what to do if the customer has agreed but is late in payment. Most of the time this happens due to the fact that the manager did not finish in the previous step.

On the other hand, the Internet business is different. For example, a person adds a product to their cart on the website, but something distracts them. In the meantime, we created a reminder mechanism. Also, you can give a small bonus.

6. Analyze your funnel and improve conversions

First, we check the effectiveness of each step and tool, measure conversion and overall performance. Of course, sales analysis is important for anyone who wants to improve business results.

For example, sales funnel analysis uses perceptual maps, benchmarks, and other tools. Firstly, problems arise due to choosing the wrong advertising channels, bad reviews, complicated ordering methods.

In the meantime, we are improving the conversion, adjusting steps, tools and teamwork.

Conclusion

First, don't be a perfectionist. Even a seasoned marketer won't create the perfect funnel the first time, almost everything needs to be tested. Avoid unnecessary steps that don't make much sense. Improve every stage, not just the inbound flow, and value every customer.

Creating a funnel is not difficult if you know your product and your audience. The most important thing is to get started!

That is all! Develop financial thinking with Ilya Sitnov. Subscribe to our newsletter here and on Yandex.Zen so you don't miss out on useful materials.