A sales funnel or a purchasing funnel illustrates the steps of customers’ journey during the purchasing period. It is based on the four stages of the purchasing period: awareness, interest, decision, and action. These stages identify the position of customers from gaining their attention to attracting the customers to buy the product or service.
Main Benefits of the Sales Funnel
The sales funnel assists companies to optimize the sales journey of their customers. Also, it enables the companies to identify the gaps in the sales journey and provide an opportunity to eliminate these gaps. Overall, the sales funnel is a useful interpretation of the purchasing steps that are experienced by the customers of the companies.
The Sales Funnel helps you:
- To identify the stages of your customers during their purchasing periods.
- To observe the purchasing behaviors of your customers.
- To optimize the customer purchasing journey or from another perspective the selling process of your company.
- To monitor and detect the gaps in your selling process.
- To take immediate action for the gaps in the process.
Explanation of the Sales Funnel
A sales funnel consists of four stages with the order of:
- Awareness,
- Interest,
- Decision,
- Action
We will go over these stages separately to clarify the reasoning and mechanism of a sales funnel.
Step 1: Awareness:
The awareness stage represents the time that a company catches a customer’s attention in the first place. The attention could be the result of advertisements, campaigns, recommendations, searches, etc. through different channels. The awareness stage carries the highest number of potential customers in comparison to the other stages of the funnel. So, this stage is quite important to increase the number of customers and make a good impression about the company and its products/ services. A customer in the awareness stage gets information about the company, what are the offerings of this company, and its products, and/or services. Even though awareness is the first stage of the sales funnel, sometimes it’s enough to convince customers to buy. But for most of the customers in different industries, customers do not take the decision of buying in the awareness stage.
Step 2: Interest
The second stage of the sales funnel is interest. In this stage, consumers do research about the company, the products/ services of the company, its expertise, similar products/ services, etc. The number of potential customers decreased from the awareness stage to the interest stage. Some of the customers could be satisfied with the offerings or not continue to be purchasing process. For keeping these customers in the sales funnel and encouraging them to buy, the content and presentation of both the company and its offerings carry high importance. Essentially, companies need to provide correct incentives to their customers in the interest stage to keep them in the selling process.
Step 3: Decision
After the stage of interest, the customers go for the decision step. Again, the number of potential customers in the decision stage is lower than in the interest stage. The customers that do not find your offerings good enough to buy or cannot match with their predictions leave the funnel. The remaining group of customers is ready to take the purchasing decision. But the buying decision mostly contains option bundles of customers. So, customers have different options to buy at this stage in general. Companies face their competitors at this stage. To win this battle and encourage customers to buy your company’s products/ services, you should put attention to your value proposition, offer benefits, create incentives, and your price offerings.
Step 4: Action
Even though the action stage is the last one on the sales funnel, it does not mean that the process ends. The remaining group of customers from the decision stage purchase your company’s product/ service and become your company’s business ecosystem. At this stage, it is important to keep these customers and encourage them to purchase more. Also, their recommendations about your company and your products/ services provide a baseline for the new customers in the awareness period. So, making a good impression on the customers’ minds in the action stage has a two-sided positive impact: firstly, to encourage them to buy more and secondly, to promote them to recommend your products/ services.
How to apply the Sales Funnel?
To apply the sales funnel to your business, FITMINDS is providing an adoption of the Sales Funnel Engagement Journey that fits your company and your company’s needs.
To get a more specialized version of the sales to funnel to segment your company’s customers with their response levels and their behaviors in the purchasing process, Hyper-Personalized Segmentation Model is your answer. Contact us to learn more about Hyper-Personalized Segmentation Model.
To get a more specialized version of the customer segmentation strategy to receive a personalized target campaign and/or campaign set for each covered customer (pharmacy or pet shop), Customer Incentive Wizard is what you are looking for. Contact us to get more information or discover your probable personalized roadmap for Customer Incentive Wizard.
Additional Tips and Readings
- You can learn more about examining buyer behavior with the Product Diffusion Curve.
- For positioning your product competitively, you can check Bowman’s Strategy Clock.
- To increase your customer loyalty and lifetime value, you can check RFM Analysis & Segmentation.
Contact us to state the main benefit of the model linked with the strategic category of the main headline.
