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Sales Funnels: The Art and Science of Efficient Sales Pipelines
Sales, by all accounts, is a perfect blend of art and science. A sales rep prospecting clients on the phone is pure art (that’s why some are good at it while others not so much), but deciding who to call is pure science (think CRMs and sales automation tools).
That’s the core objective of a sales funnel- augmenting the art of selling with the power of sales technologies to create efficient sales pipelines.
What is a Sales Funnel?
A sales funnel is a marketing concept that describes the journey a potential customer goes through from becoming aware of a product or service to making a purchase. The typical sales funnel has several stages, including awareness, interest, consideration, and purchase. At each stage, the customer is presented with different types of content or offers that are intended to move them closer to making a purchase. Sales funnels are used to track the progress of leads and customers, and to optimize the marketing and sales efforts to improve conversion rates.
Broadly speaking, a sales funnel is the umbrella term used for a series of marketing and sales activities. From discovery to conversion to feedback, everything a sales and marketing team does to acquire and retain customers is collectively referred to as a Sales Funnel. It is called a funnel because through each stage you qualify and filter your leads, improving the quality and focus with each step. Generally, a sales funnel progresses through 5 general stages:
Awareness: This is the stage where potential customers become aware of your product or service. They may have seen an advertisement, received an email, or come across an article about your product. The goal at this stage is to grab their attention and make them interested in learning more.
Interest: At this stage, the customer is actively looking for more information about your product or service. They may be comparing different options and trying to determine which one is the best fit for their needs. The goal at this stage is to provide them with the information they need to make an informed decision and to keep them engaged with your brand.
Consideration: Once the customer has gathered enough information, they will start weighing the pros and cons of your product compared to other options. They may be looking at reviews, testimonials, and case studies to help them make a decision. The goal at this stage is to build trust and credibility, and to address any concerns or objections they may have.
Intent: This is the stage where the customer has made the decision to purchase your product or service. They may be ready to buy immediately, or they may need to get buy-in from their boss or another decision-maker. The goal at this stage is to make it as easy as possible for them to move forward with the purchase, and to address any last-minute concerns or objections.
Purchase: This is the final stage where the customer actually makes the purchase. The goal at this stage is to provide a seamless and positive experience, and to make them feel confident in their decision.
In recent years, support and advocacy have also come to be recognized as essential parts of the sales funnel for their ability to drive word of mouth referrals and upsell/cross-sell conversations. Generally, marketers are responsible for the Awareness and Discovery stages while salespeople handle the Intent and Purchase. The Evaluation stage is handled by both. But keep in mind, while the traditional model of the sales funnel assumes that every customer goes through every step in order this is not necessarily true. Many customers now do all of the research on their own and move directly to the Intent stage. Similarly, someone leaving your Evaluation stage might move directly to the Intent stage. This is why it is important to have multiple sales funnels concurrently, each with their distinct stages to gain maximum traction.
Creating a Sales Funnel
To start with sales funnels, you need to first understand your target audience and their needs. Next, you need to create a clear and specific goal for your sales funnel, such as increasing conversions or reducing cart abandonment. Then, you need to identify the different stages in your sales funnel, such as awareness, interest, consideration, and purchase. Once you’ve identified the stages, you need to create content and offers that are tailored to each stage and that will move the customer through the funnel towards the final goal. It’s also important to track and measure the performance of your sales funnel, so you can make data-driven decisions to optimize it for better results.
Infrastructure for Identifying and Engaging Your Prospects
Before you start creating a sales funnel, you must first build the infrastructure for identifying and engaging your prospects. This includes two key tasks:
Defining Your Ideal Customer Profile (ICP): No matter what you sell, not everyone is going to buy it. Therefore, it is important that you clearly define who you are going to target based on metrics such as industry, location, company size, revenue, persona, etc. It is worth pointing out that the more specific ICPs you define, the better the results will be.
Creating Compelling Content: Once you have defined who you are going to target, it’s time to determine how you want to be perceived. Your content, such as a website or landing page, is the first point of contact between you and your prospects. Your first impression matters, and thus you must use this opportunity to your advantage. While generic content (like the homepage of your website) can work for the entire funnel, it is always more effective to have distinct content for each stage and each of your ICPs. For example, if you are selling automation software for factories your content for each stage would look something like this:
Awareness Stage: Blog posts and social media posts that highlight the benefits of automation in factories and how it can improve efficiency and productivity.
Interest Stage: Educational resources, such as whitepapers or ebooks, that dive deeper into the topic of factory automation and provide more in-depth information.
Consideration Stage: Case studies and testimonials from other businesses that have successfully implemented your automation software and seen positive results.
Intent Stage: Free trials or demos of your software, along with pricing information and customer support options.
Improving the Quality and Focus of Your Leads
Ideally, the more people you put into the top of a funnel, the more qualified leads (and ultimately customers) you can expect to receive at the bottom. But while that’s applicable in theory, it doesn’t quite work out in the real world due to two key factors: intelligence and data quality.
Most businesses just run generic social ads or buy email lists to run email campaigns to maximize their leads. While that puts a large number of people at the top of the funnel, they still get fewer qualified leads simply because most of the recipients don’t match their ICP.
For instance, if you have a 2% clickthrough rate on your 10K emails of which 50% match your ICP, you will get only around 100 qualified leads. Even worse, all of those unqualified leads create noise, distractions, and a drain on resources.
So what is the solution? A better strategy would be to reach out to only those people that match your ICP. This can be achieved by adding a sales intelligence platform like SalesIntel to your marketing engine. This way, you can use technographic, firmographic, location, and intent data to build more precise target lists that conform to your ICP. In this case, if you send 10K emails with a 2% clickthrough rate, you will get double the number of qualified leads.
Another problem is data quality. When businesses buy contact lists, it isn’t uncommon for over 25% of the emails to bounce. This again affects the effectiveness of a sales funnel and brings down the conversion rates. And things like high bounce rates and low engagement can threaten your ability to even send emails and have them land in people’s inboxes, jeopardizing your entire process.
To take the earlier example, using both sales intelligence and accurate data for filling the top of the funnel can boost the number of leads by almost 250%.
Nurturing Leads Through the Funnel
Once you have launched your first campaign, you will begin seeing your prospects moving through the stages. Take email campaigns, for example. Most people will not even open your mail, some will only read it, a few will click a link and visit your website, and finally, even fewer will fill out the request form.
Depending on your product, pricing, etc., you should create a sequence of emails for each stage designed to nurture them and move them to the next step in the journey. Additionally, as discussed earlier, prospects at each stage should be engaged using content appropriate for that stage. For instance, those not opening the mail should be sent awareness content while those visiting the site but not filling out a form should get evaluation content.
After your first cohort has completed a full journey through your funnel, the next task is to analyze how each of your stages performed. You should examine which content had more engagement and which ones failed to attract users or advance them to the next stage. Pay careful attention to stages where prospects are stalled or you are churning out a lot of leads that appear to be qualified.
These lessons will help you tune your overall process and build better content around which you can optimize your sales funnel.
Adding Value in the Middle of the Funnel
But some challenges are beyond prospecting and content. What if a customer finds your cost too high? Or they don’t currently need your product but might do in the future. In such cases where the price is a major contention or immediate conversion is not possible, offering a freebie can be a valuable next step.
Be it a free trial, or a limited version of your product, offering a free solution can help you fill in the middle of your funnel that will in due time filter towards the bottom. After all, if a business likes using your free tool, they are more likely to be your paying customer in the future.
Top of the Funnel vs. Bottom of the Funnel
Top of the funnel (TOFU) refers to the early stages of a sales funnel, where a customer is first becoming aware of a product or service and is gathering information. Bottom of the funnel (BOFU) refers to the later stages of a sales funnel, where the customer is close to making a purchase decision.
The TOFU aims to generate leads, while the BOFU aims to convert leads into customers and retain existing customers.
To wrap up all that we have discussed, there are four basic ingredients to creating an effective sales funnel:
- Defining your Ideal Customer Profile (ICP)
- Creating compelling content for each stage of the funnel
- Generating high-quality leads
- Nurturing leads through the funnel
Miss any of the four and you are destined to get mediocre results. We at SalesIntel play a modest but crucial role in that process. Good data can do little if you have poor content or don’t even know who your customers are. But if you can take care of the other three factors, we can guarantee SalesIntel will be a major asset to your sales funnel and the overall marketing engine.