Demystifying the sales funnel

Demystifying the sales funnel

If you’re in Marketing, you’ve probably heard this term a lot.

But what exactly does it mean?

A sales funnel, also known as a purchase funnel or conversion funnel, is a visual representation of the customer journey from the initial awareness stage to the final purchase or conversion stage. 

It illustrates the steps a potential customer goes through before making a buying decision. The sales funnel typically consists of several stages that gradually narrow down the number of prospects as they move closer to making a purchase.

Here’s a detailed definition and example of a sales funnel

Awareness stage

At the top of the sales funnel, the goal is to create awareness and attract a wide audience. This is where potential customers first discover your brand, product, or service. Marketing efforts in this stage focus on generating interest and capturing attention. 

Examples of tactics used at this stage include content marketing, social media campaigns, search engine optimisation, and advertising.

For instance, consider a small business offering services under the National Disability Insurance Scheme (NDIS). In the awareness stage, the focus is on disseminating information about the business and its services to individuals and families within the NDIS community. This could entail running informative blog posts, engaging social media campaigns, optimising search engine visibility, and strategic advertising placements. These initiatives aim to introduce the business to those seeking NDIS-related support services and to establish its presence within the target market.

Interest/evaluation stage

Once prospects are aware of your brand, they enter the interest or evaluation stage. Here, they actively seek more information about your product or service and compare it with alternatives. The goal is to nurture their interest and convince them that your offering meets their needs. 

Content such as product reviews, case studies, demos, and webinars can be effective in this stage.

For the business providing NDIS services, once individuals are aware of the business and its offerings, they enter the interest/evaluation stage. 

Here, they may explore the business website, read the service descriptions, and analyse client testimonials to assess the suitability of the services. Additionally, the business might offer resources such as informative case studies, insightful demos, or interactive webinars to further educate potential clients and address their queries. These resources aim to reinforce the value proposition and demonstrate how the business can fulfil the unique needs of individuals seeking NDIS support.

Demystifying the sales funnel

Decision stage 

In the decision stage, prospects have narrowed down their options and are ready to make a purchase. They may evaluate pricing, terms and conditions, and assess the overall value your product or service provides. This is an opportunity to address any remaining concerns, offer incentives, and facilitate the buying process.

For instance, in the context of a business operating within the NDIS sector, individuals in the decision stage have narrowed down their options and are ready to select a service provider. This presents an opportunity for the business to offer transparent pricing, flexible service arrangements, and assurances of quality and reliability. 

Ensuring clear communication, easy-to-understand terms, and a hassle-free enrollment process can further expedite the decision-making process and instil confidence in the prospect’s choice.

Action/conversion stage

At the bottom of the funnel is the action or conversion stage. This is where prospects become customers by completing the desired action, such as making a purchase, subscribing to a service, or signing up for a newsletter. The focus here is on delivering a positive experience, fulfilling the customer’s needs, and encouraging repeat business or referrals.

For our NDIS example, in the action/conversion stage, individuals finalise their decision to engage with the business’s services. Upon completing the enrollment process or signing up for services, the business focuses on delivering exceptional customer service, prompt service delivery, and ongoing support to meet the client’s needs effectively. 

By prioritising customer satisfaction and nurturing positive relationships, the business can build loyalty and encourage advocacy among its clientele, ultimately driving sustained growth and success.

It’s important to note that the sales funnel can vary based on the specific business and industry. The number of stages and their names may differ, but the overall concept of guiding prospects from awareness to conversion remains the same. Adapting and optimising the sales funnel based on customer feedback and data analysis is crucial to improving its effectiveness over time.

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