What Are Sales Funnels And Why Do You Need Them

Robert FreericksMy Tips0 Comments

Sales funnels are essential for everyone who has something to sell and with the rise of the internet the popularity of the word has increased enormously. Logical, because an optimized sales funnel is what makes online the difference between success and failure.

You can still have such a good product, but if your sales funnel does not work well together, chances are that your website or web shop will flop. That is why many companies pay a lot of attention to their sales funnel, but unfortunately it turns out that many people confuse a sales funnel with a marketing funnel and that makes them make crucial mistakes in building their sales funnel.

Why you need a sales funnel

Whether you like it or not, everyone has a sales funnel. The difference is that some companies and marketers think about how they build the funnel, while others just do something. A sales funnel is actually a well-designed flow that is designed to maximize revenue per visitor and customer.

So the question ‘why do I need a sales funnel?’, I usually answer with the following 3 arguments, which become even more clear when you have read the entire article.

1. Your customers want to be guided

It is pretty bizarre, but countless studies show that people want help with their purchase from the person or company selling the product. They want you to help them buy your product and I can imagine that you are more than prepared to do so!

Yet most companies are very passive in their sales funnel. Most vendors are too passive. Many companies put their product online and assume that the customer finds his way, but people come to the site and often have many questions that need to be answered. And even more important thresholds must be removed before the visitor is ready to convert into a customer.

With a sales funnel you can inform and teach the potential customers through a well-thought-out plan, so that you can eventually (temporarily) remove their objections and provide them with the right information to make a good choice.

2. There are only 24 hours in a day

No matter how good you are in sales and how long you can do without sleep, no one can approach leads, prospects and customers 24/7. Time is a big limitation for people. An (automated) sales funnel runs 24/7 and can act real-time on the behavior of leads, prospects and customers.

Once you have a well-organized sales funnel, your website will generate leads and orders for you 24/7. To good to be true? NO, read this article completely. You will be amazed at the possibilities of an automated sales funnel.

Anyway, a sales funnel offers you the opportunity to apply diversity in your sales and marketing activities. You are no longer solely dependent on your sales and marketing people or at least their availability.

For the people who know Six Sigma, if you only have sales people in your sales funnel, you speak of a Single Point of Failure.

3. There are usually 5-8 interactions required before someone pulls their wallet

A sales funnel is usually made up of different ‘micro conversions’, so you build up the relationship with your leads and prospects. Most companies have a flat funnel with only one conversion and that is the purchase or application, while several studies show that people need 5 – 8 interactions before they become customers.

And let me wake you up immediately, unless you are a major known company, they will not automatically come back to you if your offer isn’t good enough. No way, you have to take control and if you do not, your competitor will do it.

A sales funnel consists of several small conversions (later on more about that), giving the lead or prospect sufficient interactions with your brand or product. You have to ensure that you stay in the picture with the customer and a good sales funnel does exactly that.

What is a sales funnel?

What is a sales funnel and what is the definition of a sales funnel? I could have started with it, but I wanted to explain the importance first, so that you had a reason to read through. It is good to know the definition, especially because many people misinterpret the term.

The sales funnel definition

Wikipedia says the following:

The purchase funnel, or purchasing funnel, is a consumer focused marketing model which illustrates the theoretical customer journey towards the purchase of a product or service.

In short, a funnel is usually visually represented as funnel/filter and reflects the client’s theoretical customer journey towards the purchase of a product or service. You could therefore call it a sales process that was thought out and connected to the purchasing process of your target group.

Here you can see an example of a sales funnel. It is a graphical representation that is often used to describe the customer journey in general terms. There are many more variants to be found, but this one is used the most. Later in this article you will find a number of examples.

The difference between a sales funnel and a marketing funnel

The big difference between a sales funnel and a marketing funnel is in the goal of the two. A marketing funnel aims to increase the level of ‘awareness’ of the target group, while the sales funnel aims to lead the target group ‘to a purchase’.

The reason why I always make a distinction in this is because in the process of increasing the ‘awareness’ you want to ‘trigger’ as few as possible ‘red flags’ with your target group. In the marketing funnel you actually only communicate about the target group. You communicate about ‘the problem’ or ‘the opportunities’ and in no expression is there talk about the product or service that you offer. If you do that, the visitor will immediately attribute less value to the content, as a result of which the level of awareness is increased less quickly. Because once you combine content with a commercial expression, the prospect will consciously and unconsciously doubt the sincerity of your content.

The sales funnel on the other hand just talks about your product and service. You communicate how your product or service is the solution for ‘the problem’ or how it helps to ‘seize opportunities’. In the sales funnel you only want one thing, THE ORDER.

It is very inefficient to combine both with each other and the percentage of people who drop out (by the red flags) is significantly higher if you mix these two funnels. Funnel specialist Todd Brown showed it well in one of his trainings, see the picture below.

The parts of a sales funnel

Marketers have massively run away with the ‘funnels’ and everyone is trying to devise their own version of the sales funnel and there is nothing wrong with that. You can use the funnel to represent the stages of the sales process, but also, for example, to display the structure of products. Below I have put some examples of funnels together, so that you get an idea of how you can use the funnel.

The customer journey funnel / funnel

This is the original model, which indeed combines marketing and sales. That does not make the model wrong, but just on a higher and less detailed level. If you look at this funnel and compare it to the split that I use, Awareness and Interest are in the marketing funnel and Desire and Action are the sales funnel.

Just a short description per layer in the funnel:

Awareness – the customer is aware of his or her needs and the existence of the product or service

Interest – the customer is actively interested in the product

Desire – the customer strives to own / purchase the product

Action – the customer proceeds to the next step to purchase the product

The product funnel

Here you can see an example of a product sales funnel, which mainly describes how the product structure works.

The image shows that the first conversion is a visit to the blog, after which the visitor is tempted to subscribe to the newsletter. After that the visitor is only approached with a so-called ‘frontend offer’, which is a small purchase. The idea behind this is that a purchase of, for example, $5 is done faster than a transaction of $1000 But when the first purchase is made, it becomes much easier to bring the second.

It seems simple, but the underlying theory is very advanced and possibly one of the most powerful ways to increase customer value.

Get and grow customer funnel

This funnel starts with a first transaction and has the focus on growing the turnover / profit per customer.

This funnel comes closest to the sales funnel as I think it should be. If you can increase the profit per customer, you can offer more for a new customer and thus win the bidding war of your competitor, because there are few companies that look at what a new customer may cost. And if you can pay more for a new customer, you will generate more new customers.

So now you know that sales funnels are absolutely crucial to be successful online. If you don’t know how to create a perfect sales funnel, click the button below and learn it!

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