What is a Sales Funnel, and How Do You Build One?
Growing a business is not an easy task, and the post-coronavirus landscape is certainly not helping. Myriad market pressures and government directives, as well as the tempering effect of the receding pandemic, have resulted in particularly slow growth figures. Vitally, though, market demand itself has not changed. Customers might be a little less inclined to part with their money for a product or service, but the market remains – and sales funnels could be the key to growing your customer base.
What is a Sales Funnel?
A sales funnel is, essentially, the journey a potential customer makes with regard to your product or service, from learning about its existence to tangibly investing in it. The term is used by businesses as a way of better understand the decisions their customers make in arriving at their offerings; engagement with the actions and processes that make up a sales funnel is crucial in consolidating and even increasing customer uptake or onboarding. By curating and customising your business’ sales funnels, you can gain more direct control of the way in which your business grows, and its stake in your industry.
The Make-Up of a Sales Funnel
Principally, sales funnels comprise of four distinct stages: awareness, interest, decision and action. The first stage in the customer’s journey is awareness, or the mechanism by which they become familiar with your business. This could be via word-of-mouth, customer testimony, social media presence or other marketing avenues. The second stage, interest, represents the point at which the customer is actively searching for a product or service relating to your business. In this stage they might be comparing deals between yourself and your competitors, or otherwise learning more about their needs and the options you and other businesses provide. The decision stage is the natural conclusion to the interest stage, as the customer, having narrowed down their options, gears up to put their money towards a service – which they eventually will, in the form of action.
Building a Sales Funnel for Your Business
The sales funnel is not merely a method of describing a customer’s individual journey; it is a mechanism, and careful tuning of marketing and customer service can inform consumer decisions at all four stages of the funnel – keeping them on-track to become your next customer, and increasing the likelihood of repeat custom and publicity through recommendation.
If you’re a relatively new business, growing a product or service from scratch with next-to-no customer base, then robust investment in your marketing department is your wisest move. Taking out a business loan can help you expand your marketing department and advertising budget, allowing you to widen the opening of your funnel and increase awareness of your business to potential customers.
For businesses with an established brand and sector awareness, special attention should instead be paid to the interest stage; how do you turn people who are aware of your demographic into actively interested parties? Offering potential customers something for direct interaction can directly increase engagement with your business. Use loss-leader products or services (such as branded merchandise) to incentivise sign-ups to a mailing list, then use that mailing list to inform recipients about your brand, mission and the usefulness of your offering. Mailing lists consistently reward you with an ROI of over 3500%, making them a valuable asset to grow.
In terms of decision and action, these can be spurred on by limited-time offers and exclusive discounts, which will either accelerate new customers through the funnel or tip previously-unconvinced leads over the fence and into purchasing. With simple decisions targeting each point of your sales funnel, you can drastically – and shrewdly – affect the success of your business.