A sales funnel (also called a sales funnel) is the process your potential customer goes through from the time they initially enter your portal until they become an end customer when making a purchase or acquiring your service.
This process is usually structured in stages through which you can attract, filter, and nurture users until you reach those who could become customers; hence also its name conversion funnel.
It is common to find that the funnel or sales funnel are called in different ways: marketing funnel, conversion funnel, marketing funnel, and marketing funnel or sales funnel in English. Make no mistake, they all refer to the same procedure.
The sales funnel is a procedure that allows you to understand the information needs of your buyer people throughout their purchase cycle, as well as the characteristics of the users at each stage, especially those who are more inclined to purchase.
With this understanding, you will be able to develop a nutrition and lead qualification strategy that allows you to make common visitors to your website to become customers.
This strategy must have content that responds to the doubts that your clients usually have during their purchase process. You can deliver or offer them as downloadable content offers, emails, videos, infographics or the one that your potential customer usually prefers.
The design and structure of a conversion funnel can be simple or complex, but it regularly revolves around the three typical phases: ToFu, MoFu, and BoFu. The important thing is that you customize the funnel to efficiently represent the phases of the actual sales in your company.
Typical stages of the sales funnel
The sales funnel is generally divided into three main stages: the top stage of the funnel (TOFU), the middle stage (MOFU), and the final stage (BOFU).
Next, I will define and explain each of the stages of said process.
Initial stage (Top of the funnel, TOFU)
This is the first stage of user contact with your portal. It usually includes web traffic or visitors to your website as well as leads that require nutrition, blog subscribers, or those who downloaded a content offer.
This first stage is usually the direct responsibility of the marketing team.
The user may have found your portal through search engines, social networks, or some warning on the network. In this first step, you should try to get as many users as possible and, at least, the email of the people, to continue with your sales funnel.
When it is still at the top of the funnel, the user expresses a certain interest in some of the services you offer, but there is still a long way to go to decide whether or not to purchase them, although, you already know that you have a need. Hence the importance of attracting him and showing him that you understand his problem and the possible ways to solve it.
You don’t need to make a big investment for every person at this level, rather, you should focus on developing a scalable strategy with automated actions. In this way, your sales team will be able to focus on the prospects closest to closing, while the marketing team continues to generate content to nurture other users.
Two of the main objectives at this stage is to generate quality traffic and get people to leave their data, at least one name, and email so that you can create specific campaigns for them.
Some content that may be useful in your ToFu actions are:
- Articles on the blog
- Video tutorials or video content
Now comes the hardest part: getting those users down through the sales funnel!
Middle stage (Middle of the funnel, MOFU)
Once you have the person in the funnel, then you should keep their attention and offer content that meets their expectations and information needs. Raise their interest until it can become an SLA or an SQL, depending on the phases you have determined for your company’s funnel.
At this stage you should worry about offering greater value, to generate the necessary trust and credibility that the sale requires in the next phase.
The middle part of the conversion funnel is a shared responsibility: the marketing and sales team have a say in it. It is important that the objectives and functions of each area are well aligned so that valuable sales opportunities are not lost in the process.
At this point, it is in your best interest to help your buyer person evaluate their options carefully, since, in their purchase process, they are in the consideration stage. Often times, this phase can be the most complex to define and implement in the entire sales funnel.
It will help you to be clear about the specific needs and challenges of your ideal buyers so that you can develop informative content that helps them understand why your product or service is the best solution.
Make sure that the user gets from you all the information they need to make a purchase decision.
Be more useful than ever. Show yourself as a reference in the sector and guide prospects towards the correct decision for their needs, although, this may not benefit you in some cases.
Among the type of content that is usually used in MoFu are:
- Study cases
The final stage (Bottom of the funnel, BOFU)
This is the final and most important stage of the funnel since it is the moment when the buyer persona decides to buy your service or that of your competition. The monitoring must be personalized and focused on informing about the characteristics of your product, benefits and differentiators.
BoFu is the ideal time to convince your prospect to make the purchase with your company, so the type of content should help the user to identify why the solution you offer is the right one for them.
Generating validation and credibility is essential in the process and you can achieve it through testimonials and opinions of your current clients. You can also use other types of material such as:
- Study cases
- Free Trials
- Segmented email campaigns
Keep in mind that, although it is the last stage within the sales funnel, this could become the initial step in a lasting business relationship with the customer, that is, customer loyalty begins.
Although some specialists treat this aspect as a fourth stage, I prefer to develop it as a consequence of the sale closing. The truth is that it represents the possibility of the beginning of a new cycle and a new beginning of the sales funnel, through up-selling and cross-selling.
What use is a conversion funnel?
As you have seen so far, defining the conversion funnel allows you to identify the actions you need to take to achieve your company’s objectives, hence its importance. But in this process, you also get other benefits:
- The sales funnel shows you which level users are on their way to purchase.
- It allows you to identify what content you should create to help these users and prospects during their buyer’s journey.
- It gives you the chance to interact with it and move it to another level within your funnel.
- You can better focus and adjust your strategies and tactics to achieve greater efficiency and conversion rate between each stage.
- It helps you to identify the stages that you must repower, to achieve greater satisfaction for the user.
- You achieve greater integration between the actions of your marketing and sales team, which also generates better conversion rates (better results).
- To a large extent, it works automatically, which saves you time and money since you could take care of other things in your company, while the sales funnel works automatically.
- You will be able to examine your current processes and determine what should continue to be carried out at each stage, what should be improved, and what decreases productivity.
- You will be able to recognize which actions and specific channels generate the best conversion rates in each phase of the funnel.
- Ultimately, you’ll recognize the ideal flow of tasks that need to be done to make it easier for a higher percentage of digital reach to turn into sales.
- From a financial point of view, a sales funnel can help you better plan your investment budget, for example in inbound marketing, by showing you the stages in which you must invest to optimize them.
in summary, you will be able to better target your inbound marketing strategies and actions.
How to create the ideal funnel for your company?
Each company must design its own sales funnel to suit them, since the requirements vary according to the company, the sector, the clients, etc. The most important thing, in the beginning, is to be clear about who your potential customers are and to have a traced route for your funnel, step by step, from start to finish.
Of course, this initial design can be adjusted at start-up. The sales funnel must be a process in constant growth, which adjusts to new demands.
Just as the design must be adjusted to your company, the tools too. Therefore, you can use all the tools at your fingertips and measures, as long as they are efficient and consistent with your purpose.
Although there is no strict formula to create it, I share the basic steps to make your sales funnel functional:
Step 1: Define your buyer people
Above all, it is important to be clear about the profiles of your ideal clients and above all to identify what interests them, their characteristics, and their behavioral style.
If you have not yet defined it precisely, I share this guide to establish your buyer persona.
Step 2: Define the buyer´s journey
Normally, a buyer’s journey is defined in which the processes of all buyer people usually fit. However, depending on your business model, you may need to identify and establish more than one purchasing process.
You must be clear about the steps and stages that your potential customers normally follow in the sales funnel. Identify the journey of the users from the first approach until they purchase your product or service.
Be sure to detail what information needs people have throughout this process, because you will need it in the next steps.
Step 3: Define processes for ToFu, Mofu, and BoFu
When designing your sales funnel run, mentally run it yourself and ask yourself if that’s what your customer really wants and how you can go about giving them what they need.
Once this exercise is carried out, identify the stages in which your sales process is normally segmented, it must have a clear integration with the buyer’s journey.
It is recommended that you also post guide questions of what the user regularly asks or expects at each stage, to serve as a model for your marketing and sales teams.
Finally, it delimits in a general way what actions will be carried out at each stage of the conversion funnel and who is responsible. Basically, the definition of the processes should include the answer to the 5 marketing questions, I share a basic example:
- What will be done? For the traffic attraction phase in Top of the Funnel, SEO will be worked on the page and off-page, PPC ads will be created and will be disseminated in social media groups.
- Why? They are the main sources in which the company’s buyer people are located.
- Who will be in charge? Marketing team.
- How will it be implemented? In parallel, PPC campaigns will be implemented to landing pages or central content, link building and conversion routes will be worked on.
- Where will it take place? PPC on LinkedIn, dissemination on Facebook and LinkedIn groups, SEO off-page on related authority sites.
Keep in mind that, in this step, you delimit the information in broad strokes and in the following steps you must specify each action, medium, and resource that they intend to use.
It is important that you specify the responsibilities of the marketing and sales teams and even those directly responsible.
Remember that the process does not end in the sale, you can integrate your customers to new funnels of up-selling and cross-selling.
Step 4: Create content
First of all, think: how can you help the user to better understand their problem? How can a prospect trust what you offer and why should they choose your company?
In a previous step, you defined what doubts and needs you to have throughout the purchasing process and how it relates to your sales process. It is time to use this information.
Define and create specific content that will help the user to solve each of the concerns and doubts that they present during their buyer’s journey.
Delimit what type of content will be, whether or not they will be within a conversion path, whether they will be used in automated marketing campaigns and above all what their role will be in your sales funnel, that is: how they will help your prospect advance one stage to another.
Take into account according to the buyer persona what type of content you prefer and it is easier for you to consume.
Step 5: Create conversion paths
It is not enough to create content, to be able to lead nurturing you need to have at least one email. You must find the strategies that work for you to convert simple visitors into leads.
To achieve this, it is important that you define conversion paths in which you take into account:
- An attractive content offering for the corresponding funnel phase. It may be more information, subscription to send a magazine, newsletter or electronic brochure; videos, discounts or promotions, among others.
- Clear and compelling calls to action.
- You can use a landing page, to get relevant information from them, such as their email, name or other information.
- Contact forms according to the stage of the sales funnel.
- Thank you page where you can access the content offer.
- A confirmation email with the content offered and additional content.
Also, consider having a simple way to subscribe to your company’s blog.
Always keep the conversion paths to a stage of the marketing funnel clearly focused and generate them for each of the stages.
Developing conversion paths is crucial because it is what will allow you to convert users into potential clients or not.
Step 6: Generate traffic
If you have excellent content but no one knows, all the effort you’ve made up to this step will be of little use.
It’s time to implement what you planned in step 3 when defining the processes and actions of each stage: use social or professional networks, PPC, email and all those resources that help you generate reach and qualified traffic to your website and routes Of conversation.
You must make your portal more visible so that more people reach it.
For this, you can use strategies that increase the digital presence on the web such as SEO on-page and off-page. If they don’t know your company online, then it doesn’t exist in it.
It is essential that you spread the content on the channels that your buyer people usually use.
Step 7: Create qualification flows and automatic nutrition
Once you have already gained new leads that show interest in topics related to your sector, product or service, you should try to convert them into qualified leads, which are those that show a greater interest in your services or products.
First of all, you must have defined the characteristics that define a qualified lead. It is ideal that you implement automatic qualification flows so that, according to the actions and behavior of the leads, you can identify those who are ready to be contacted by your sales team.
The qualification of leads is closely related to the phase of the conversion funnel in which it is, you can assign values by characteristic or action that help you identify the potential of each lead regarding the sale.
This segmentation is important, as it is what will allow you to take them to the final stage of the conversion funnel. At this point you must select and segment those who have shown interest, to give them answers to their specific needs.
However, it is impossible for your team to follow up on all leads directly, in a timely and efficient manner. This is where automatic lead nutrition comes into play.
Automated nutrition campaigns will allow you to set parameters so that lead groups that meet certain criteria and/or qualifications receive campaigns specifically created for that phase of the marketing funnel.
Through them, you can provide timely and relevant information to all your leads without having to directly intervene a member of your team.
The lead qualification will positively influence the conversion rate between each phase, as well as the efficiency and productivity of your marketing and sales teams.
Remember that the entire strategy must focus on the customer, their characteristics, needs and purchase cycle, not on the company, for this you carried out the previous stages of development for your sales funnel.
Step 8: Optimize through A / B testing
In this step, it is important that you perform functionality tests and results in each of the resources and stages of your marketing funnel, this way you can have different parameters on which to evaluate what works best and implement it.
Some of the things you can do A / B testing on are:
- Issues and senders in emails
- Email content: text, calls to action, color, links
- Colors and copy in the CTAs
- Titles, small blocks of text and colors on landing pages
- Required fields on forms
- Titles and meta descriptions in posts
- Content offerings offered
- PPC ad types
If you make more than two changes per test, you will not be able to identify which modified element is the one that gave a different result. Make small 2-factor variations each time.
Step 9: constantly monitor and measure
You must keep strict control of the metrics defined for your project. If you implement any new inbound marketing or other action that may affect the flow of your marketing funnel, you must carry the before, during, and after metrics.
You should also monitor and measure even if you have not made any changes, in order to define whether there are changes in the market if you are facing a temporary situation or to establish if any action, previously carried out, begins to give results.
Remember not only to monitor what you are doing but also what the competition has implemented.
And finally, analyze the conversion rates between each stage of your sales funnel, per share, channel and KPI. This will allow you to carry out corrective and improvement actions for scalable results over time.
How to calculate the numbers you need in your conversion funnel?
To achieve an efficient sales funnel you not only need to know and plan the general aspects, you also need to determine the target numbers at each stage of the funnel to reach the final metric: sales.
Follow the next steps:
Step 1: Calculate based on your sales goals
Identify the amount of your monthly sales target and divide it by the average invoice. For example, if you need to cover 250 thousand dollars a month, and the average ticket price is 1500 USD, then you need to make 167 monthly sales.
Step 2: Identify current conversion rates
Analyze current business results and identify conversion rates between each. Ask yourself:
- How much reach is generated monthly on digital channels? Be it in PPC, reach in social networks or any other.
- From this scope, what is the web traffic generated? Take the percentage between both stages, for example, if 200,000 people see you monthly but only 20,000 enter your website, your conversion rate is 10%
- Now, of the people who enter your website, how many request information? Suppose 300, then the traffic to lead conversion rate would be 1.5%
- Suppose of those cold leads, you manage to establish initial contact with 250. The conversion would be 83.3%
- Then you need to know how many meetings you get from those contacts. Suppose 150. Your conversion rate would be 60%
- If of those meetings you were able to present 100 proposals, then you would have an index between these stages of 66.66%
- And if of those 100 proposals you managed to close 30, then you would have a 30% closing conversion, between these last two phases.
Important: you must take into account the actual stages of your sales funnel, for this you must have previously analyzed your sales process.
All companies are different, even if they are in the same sector and the conversion rates achieved in each channel (for example in social networks than in Adwords, or inbound calls to organic traffic) may also be different, and even the levels of conversion achieved by each representative of your sales team.
At first, do not complicate yourself and get a general one, as you advance and learn more about your funnel, you can go deeper and analyze in greater detail to make improvements.
Step 3: Divide your sales target by your conversion rate per stage
In the example, 167 monthly sales were required, if the conversion rate at closing is 30%, then 167 / .3 = 556.6
This indicates that they would need to make 557 proposals to achieve 167 new clients.
All this would lead you to have a funnel-like the one in the image:
Step 4: Assign sales quotas
At this point, all you need is to divide the number of clients you require by the number of commercial representatives.
There are different ways to do it, you can take into account two general ways:
- Assign equal quotas: there will be advisers whose conversion rate from meetings to proposals is higher than others, or from proposals to closings is higher. This will mean that they will need fewer prospects to reach their goal.
- Assign quotas based on closing rates: this implies that you must measure the conversion rates of each of the representatives of your sales team to know how many prospects should be closing per month, with a certain number of prospects.
Guide your processes with a sales funnel
As you can see, it is important to know the process of marketing funnel to take advantage of the benefits it can bring to your company.
Visitors, curious, leads, qualified prospects, and more pass through your portal. It depends on a good strategy to filter and select your potential clients through a well-designed sales funnel that works for you.
For this reason, it is also important to generate relevant content that adds value to users and that contributes to increasing the credibility and confidence of your company.
I hope this post has clarified for you regarding the sales funnel.
If you have any ideas or questions about how to improve sales funnel, write to me.