What Is a Sales Funnel?
For most businesses, the process of customer acquisition is a long, arduous and expensive one. This seems to be true regardless of whether a company operates in the business to consumer (B2C) or business to business (B2B) space. In both cases, companies allocate much of their time, effort, and budget to ensuring that potential customers know about them and their products, or if they already do, that these same customers stay with them for the long haul.
Over time, companies have noticed that their customers seem to go on a journey of sorts, from being complete strangers to paying customers and in the best cases, willing advocates and evangelists for the company. This journey is often referred to as a sales funnel and tracks the path a potential customer takes. To streamline this process, some companies have broken the sales funnel down into stages, with the widest part of the funnel being referred to as the awareness phase, and the narrowest part of it referred to as the action or completion stage.
In this article, we will explore each part of the funnel and what its function is, as well as how to optimize each one for best results.
Stage 1: Awareness
As mentioned above, the earliest part of the customer journey is the awareness stage. At this point, potential customers are still being introduced to the company’s brand in whatever way the company’s marketing professionals deem most appropriate. In some cases, this is done by pay per click advertising, also known as PPC Singapore businesses can rely on. In other cases, companies might consider cold emails and direct mail campaigns the most effective way to connect with potential customers. Still others might consider search engine optimisation, content marketing, or social media marketing their best bets, while the biggest companies are likely to invest at least a little of their marketing budget in all of these channels.
Choosing which of these channels to focus on takes skill and marketing savvy, along with an awareness of what kinds of communications potential customers would be most receptive to. It should also be noted that while the dream of building an enormous awareness stage for a sales funnel does seem like an attractive option, this would definitely require a massive investment both in terms of labor and financial resources.
Stage 2: Interest
Once your potential clients have become aware of your brand, your company’s next task is to pique their interest. It’s usually at this stage that potential customers begin weighing your value proposition against what they actually need. More often than not, if what you’re offering matches up with a need the potential buyer considers important, they’ll move on to the next phase of the sales funnel, usually called the decision phase.
Stage 3: Decision
This is a very important stage of the funnel because this is the time that competition comes into the picture. It’s usually at this point that the potential buyer has decided that what you’re offering is of value to them, which is great news for you! A potential sale is just around the corner.
However, this is also a very precarious time in the customer journey because alongside you and your value proposition, your potential customers are also likely considering your competition. If at this point, they decide that their purchasing budget yields more value at the store next door rather than with you, they’ll definitely take their business elsewhere, leaving you out in the cold. Prevent this from happening with aggressive sales tactics like personalized sales calls, free demos or samples, more attractive payment terms or anything else that you can think of that will communicate to your potential customers that they are highly valued.
It should also be noted that the tactics that you put into place at this point should be different enough from your competitors to give you an edge in your potential customers’ minds. After all, if you just do the same thing as the other brand, why should you and your products be preferred over them?
Stage 4: Action
If at each of the prior stages, your company has managed to prove to your potential customers that your products are superior to those of the competition, then congratulations, you’ve reached the action phase. It’s at this point that the sale is completed and you’ve won the customer over.
However, you can’t rest on your laurels just yet. While you may have won a new customer, your next task is to keep them. The lifeblood of many businesses is repeat purchase, after all, so you have to be prepared with freebies, promos, and other tactics that will ensure your customers keep their business with you.
Finally, you should take note that this is a sales funnel, and as such, it gets narrower and narrower as the potential customers progress towards becoming actual customers. Not every person who is aware of your brand will become a sales lead. In the same way, not every sales lead will become a customer, and not every customer will become a repeat customer. Revisiting each stage of the funnel regularly to see what gaps can be filled will go a long way towards maximizing your potential revenue and winning market share.18 Sep 2021
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