What Is a Sales Funnel?

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What Is a Sales Funnel? Plus, Should We Really Call It That?

“Sales funnel” is an analogy for the journey prospects take to become leads.

People describe this process as a funnel — namely, E. St Elmo Lewis who created the concept in 1898 — and it stuck, even though it’s kind of inaccurate.

Unlike an actual funnel you’d play around with during lab class, not everything (or rather, everyone) will reemerge out of the other end of a sales funnel. In practice, the sales process is more like a Hogwarts sorting hat. Some customers will make the Gryffindor cut, and others won’t.

Importantly, it certainly shouldn’t feel like a conventional funnel to your customers, where everything drains out — including the valuable stuff.

Instead, we like to think of a sales funnel in terms of the cult classic, Donnie Darko — specifically the scene where Donnie starts to see a time tunnel, letting him know where he needs to go next before his conscious mind realises it.

Realistically, Why Should You Use a Sales Funnel?

The term sales funnel can come with a lot of baggage.

Terminology like “multi-functional” and “sales automation” can make the concept sound more technical than it actually is. Plus, while sales funnels do work, they’re often hyped up, tending to over-promise and under-deliver — turning off marketing managers and business leaders before they’ve had the chance to experience the benefits.

Sales funnels can turn underperforming firms into multi-million dollar companies. But they also work just fine for the small businesses, solo entrepreneurs and the steady growers amongst us.

What Happens When Customers Enter a Sales Funnel?

The thought behind a funnel is that customers don’t simply get from A to B.

They need to be nurtured like most of us starting a new relationship. Prospects like to get to know your brand, your track record and your values before committing — or, converting in business talk.

Depending on your target audience, you might use different types of content to “break the ice” with your customers. A staggered email newsletter, a free downloadable resource and a retargeting ad campaign can all act as valuable steps in the funnel. Done correctly, irrelevant leads will drop off and those suited to your product or service will continue their exploration.

Most marketing materials claim sales funnels fall under digital marketing. As digital marketers, while we’d like to claim this is true — but it isn’t.

Sales funnels have always existed — even when technology wasn’t part of the process.

In the past, we bet entrusting a shepherd with your herd wasn’t a decision taken lightly. The prospect might ask the other villagers their opinion of the shepherd. Then, they might observe the shepherd at work for a while before signing over such precious sheep. This process is all a sales funnel really is — we just don’t label it this way.

The same goes for visiting a modern-day LUSH Cosmetics store. The initial scent and millennial branding enticing us in and we’re met by an overly familiar sales assistant who starts to give us an awkwardly public hand massage. Eventually, we say “I want it all — especially that hand soap. Bag it up.”

Sales funnels can exist in all sorts of scenarios. They’ve been likened to human relationships plenty of times. But we tend to make them officially known in digital marketing where we can build visible processes that prove their existence.

Photo from inside a Lush store.

Inside a Lush Cosmetics store. Image via mind-mag.com

Another (Actually Useful) Marketing Acronym — AIDA

As though you haven’t had enough of acronyms in marketing speak by now, sales funnels are sometimes associated with AIDA — Awareness, Interest, Desire and Action.

E St. Elmo Lewis also created this acronym, which explains why the process fits so neatly with the original concept.

Graphic showing different search intents

These four steps describe the logical stages a customer takes getting from A to B (with a little bit of marketing encouragement).

Awareness — Brand awareness activities sit at the top of the funnel, acting as the ultimate sales magnet.

They usually consist of some sort of offer providing value to a prospect that is relevant to your company.

Exposure Ninja’s equivalent is its’ free marketing review. The production of a completely bespoke 15-minute video, packed with expert advice, is like gold dust to marketing managers and business owners. It’s also a great way for us to begin building relationships with those who might need our help.

More generally, brand awareness — and unaided brand awareness — can happen as a result of long-term marketing activities that help customers to associate your brand with its services. The more brand awareness you have, the easier it is for people to enter your sales funnel.

For example, lots of people looking to buy new sneakers might click on Nike’s website during their research process (without the promise of a life-changing ebook to persuade them).

Awareness can also be increased by digital marketing activities like SEO when a prospect is introduced to your brand when your website shows up in a search for a relevant term. The best part is, these first impressions are killers, as potential customers meet you as an authority in the field.

Interest — As customers transition to the second step, your job is to keep them interested.

You’ve succeeded in getting customers to your website — now it’s time to keep them there. Put simply, if you’ve promised a particular offer, you better deliver.

Let’s say during the awareness stage you offered a free diet ebook to show personal training prospects how to lose weight in 28 days. To peak and retain a reader’s interest, this content must be well-researched — ideally written by a qualified author. It should also provide what it says on the tin (a full 28-day plan that avoids repetition and sneaky shortcuts), and be different to every other diet ebook on the market (seriously — we’re sick of hearing about the versatility of overnight oats).

In terms of Exposure Ninja’s free marketing review, we do the following things to stimulate interest:

  • Show Authority — Our free reviews are carried out by Ninjas who are the epitome of stealth, knowledge and success. When carrying out reviews, we explain technical terminology when we use it and highlight similar scenarios we have dealt with in the past — all indicating we know our stuff. We might also sneak in a software flex to show prospects we’re not afraid to invest and innovate.
  • Provide Value — During those 15-minutes, we give everything away. Why? We want prospects to be genuinely impressed and engaged during the interest stage of AIDA. If you try to hold back from revealing all of your knowledge for fear no one will need you or will steal your secrets, you’ll only end up with lazy leads who want someone to do all the hard work for them because they can’t figure it out. That’s not our style — and we know it’s not yours either.
  • Do Something Different — The premise of getting a free review has been used before by plenty of marketing agencies. We make sure our reviews are set apart by the attention to detail and thoroughness we provide. Want us to review your website? We might also delve into your social media accounts and your competitor’s websites to give you a real overview of the topic. Basically, we’re not regurgitating overnight oat recipes — rather we’re giving you something new and delicious to chew on to reach your goals.
  • Desire — Assuming your prospects have managed to scan every day of your diet plan or ours sit through our fifteen-minute mini-consultation, it’s now time to initiate desire.

Okay, this step sometimes swaps out to be called the decision stage by more boring business publications. But desire is sexier and more exciting — exactly how it should feel when you get your first, thirtieth or millionth lead in business — so we’ll stick with desire.

Desire is when customers tip over the edge. They are no longer just toying with the idea of investing but finally making that concrete decision to part with their cash.

What makes them feel this way? A compelling Call to Action (CTA), of course.

A CTA should be short, snappy and irresistible, using direct language like “get”, “explore” or “discover.” The trick here is to create a hook that’s easy to understand yet powerful. If this were a poem, it would be a haiku, not an epic.

Action — Now let’s make your captivating Call to Action functional during the action stage.

All that’s left to do is for customers to make the first move — but don’t let those tricky bra straps, fussy packaging or broken web pages get in the way of such a beautiful moment.

You should be focusing on how easy it is for your customer to grab what they want.

Does your CTA feel like ripping off a band-aid or is it more like identifying which squares the buses are in to prove you’re not a robot— only for them to continuously reappear?

Simplify the sale process, the information requested and the time it takes for prospects to turn into leads. Don’t let shopping with you turn into an awkward encounter.

Using a Sales Funnel to Start or Scale

Still stumped as to whether you need a sales funnel? If it isn’t clear enough by now, a sales funnel is always a good idea.

Whether you’re a shepherd looking for stellar sheep reviews or an online business seeking to scale your monthly leads, a sales funnel will help you achieve your goals.

Although sales funnels are often talked about in terms of scaling a well-established business to the big bucks, this process can be simplified to add structure to small business too.

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