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How can understanding your sales funnel help your business?

sales funnel

If you’ve been involved in sales and marketing on any level, you have probably heard of the sales and marketing funnel.

A visual way to depict the process your customers take from lead to conversion, your sales and marketing funnel is more than just a pretty picture. If you want to get the most out of your business in terms of sales and profits, understanding how your marketing funnel works could be the key.

What are the stages of the sales and marketing funnel?

The marketing funnel is broken down into the steps required for your business to move leads from the first expression of interest to making a sale. There’s no one size fits all approach to a sales and marketing funnel – the stages will be different for each business, and the funnel varies between B2B businesses and B2C businesses.

Although your customers may not necessarily move through the stages in an orderly fashion, there is usually a pattern that helps you understand your customers and how they make the decision to purchase from you. Understanding this can help you improve the process and increase your sales.

Stage 1

Stage one is when a lead drops in to the top of the funnel. A lead or prospect is defined as anyone who has shown some level of interest in your product or service.

Stage 2

Stage two is where you “qualify” that lead to find out whether they are a serious customer or just an idle speculator, and whether they are interested in what you have to sell. This is usually done through dialogue, which can be over the phone, face to face, via email or social media conversation.

Stage 3

This is where you prepare a proposal or quote using the information you’ve gathered about your prospect and their needs in the previous stage. Once they have received your proposal, your lead will consider it against any other proposals they have received, and their own expectations in terms of price and features.

Stage 4

If you have been successful in the previous stage, this is where your lead accepts your proposal or quote, and drops out of the bottom of the funnel as a paying customer.

About the Author:

Jo Macdermott is the Chief Marketing Consultant at Next Marketing in Melbourne. She has 15 years of marketing experience, is a Certified Practising Marketer and is a sought after marketing media commentator. Jo specialises in working with small and medium businesses. Follow her on Twitter here.