Every time we make a purchase online, we go through approximately the same path, from searching for the right product to the “Place an order” button. Internet marketers guide us along this path – it is called a sales funnel. We tell you what a sales funnel is, in simple terms, and how it is structured, what tasks it solves and how to understand that something is going wrong.
What is a sales funnel
How to build a sales funnel
How to Make a Sales Funnel Effective
How to automate a funnel
Types of sales funnels and their features
What data does a company’s sales funnel show?
How to increase conversion?
What is a sales funnel
Table of Contents
When someone buys a product in a store, orders groceries to their home, or signs up for a paid subscription, they rarely think about the steps that preceded it. It seems that everything is simple: saw, bought, or ordered. In fact, this is preceded by searching for information about the product or service, choosing from several options, comparing the conditions of different sellers.
A sales funnel in internet marketing is the entire path a customer takes before making a purchase. It starts with the first touch of a product: an ad, a search result line, an article in an online media outlet, or a personal recommendation. Every stage of the sales funnel is important along the way, so internet marketers carefully monitor analytics numbers, study customer behavior, and immediately adjust their actions if they do not bring the expected results.
With the help of a funnel, you can solve a variety of problems: from direct sales to increasing loyalty. But most importantly, it helps you understand where and why a business is losing customers, whether the marketing strategy is effective, and how to correct shortcomings.
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How to build a sales funnel
The principles of a typical marketing funnel were first described 110 years ago by advertising specialist Elias Lewis. They are also used by modern Internet marketers. Lewis described the stages a typical consumer goes through before making a deal:
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attention,
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interest,
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desire,
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action.
At each stage of creating a sales funnel, some percentage of consumers are eliminated, but those who are more and more interested in the product reach the final stage. Hence the shape of the funnel – narrowing downwards.
For example, 10,000 people were searching the Internet for information on where to buy camping tents in Moscow and saw contextual advertising for an online store. Of these, about 1,000 were interested in the ad and went to the site. Another 100 found the tent they needed and began placing an order. But then 90 changed their minds or found the same one at a discount, and only 10 people completed the purchase.
The main task of a marketer is to convert the attention of as many customers as possible into a desire to buy a product.
How to Make a Sales Funnel Effective
If potential clients are being dropped at each stage of the funnel, then you need to figure out why this is happening. Sometimes these are objective factors that are difficult to combat: for example, supply problems, the situation in the industry or the economy as a whole. But many barriers can be eliminated. In the example above, out of 10 thousand interested people, only 10 reached the final. To get 20 or even 30, you need to fine-tune the sales funnel at each stage:
- Make sure that the product (goods or service) is useful and valuable to the target audience. If these are active tourists who are looking for a tent for long hikes, then it should be light and durable, and also take up as little space as possible.
- Think about how to work with “cold” clients — that is, those who don’t even know about the product. In the case of a tent, it’s convenient to do this through tourist forums and groups on social networks where they discuss routes for hiking and camping.
- Generate interest by focusing on real advantages and benefits. For example, explain that this is a waterproof tent with wind protection that unfolds itself.
- Work through potential customer objections. If your product is more expensive than your competitors, tell them that it will last longer, offer a long-term guarantee and free shipping.
- Ensure that managers and consultants process orders on time and efficiently.
- Conduct a sales funnel analysis at each stage. This is necessary to understand where and why customers leave, even if they were initially interested in the product.
For example, clients come to a travel agency website, leave requests, after which a manager contacts them, who helps them choose a suitable tour and advises which hotel best suits their needs. Usually, out of 100 requests, 60 end in a purchase, but with the arrival of a new manager, their number dropped to 30. You need to find out the reason, work on it and see how this affects the numbers. To do this, you can look at correspondence or recordings of conversations with clients, check scripts (dialogue scripts) and the relevance of the employee’s knowledge in specific areas.
How to automate a funnel
In Internet marketing, building a sales funnel can be automated, either partially or completely. For this, special software and online tools are used: for example, CRM systems and MRM platforms. With their help, you can build ready-made models of sales funnels based on specified parameters where purchase scenarios are identical and repeated regularly. American marketer Ryan Rice was the first to propose such an algorithm. Unlike a classic funnel, where the consumer agrees at each stage to what is offered to him, in an automatic funnel you can set alternative options in case of objections or refusals. For example, offer another website, package or discount on a product. Then the client is more likely to reach the final and complete the deal. Here’s how it looks in practice:
Warm-up: the client is offered a free tester or trial version of the product on a special landing page.
Lead magnet: These are different versions or types of product presentation for different audience segments that are obtained through research. At this stage of funnel building, you can test which version works best.
Sales: closing the deal and processing orders. But automated funnels don’t work everywhere: for example, they won’t work for promoting luxury and technically complex products and services to a narrow audience. An online marketer still needs to monitor how the sales funnel works, change the strategy if necessary, or come up with some non-trivial moves for products and services where traditional methods don’t work.
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Types of sales funnels and their features
Let’s take a closer look at the different types of sales funnels and what they are characterized by.
Funnels for working with “hot” and “cold” clients will be different. In the first case, the interest generation stage can sometimes be skipped: if we are talking about mass products that are already in high demand.
Conversely, if it is a complex product for a narrow audience — say, corporate software solutions or equipment for a specific industry — you will have to pay more attention to the first stage. This can be done, for example, with the help of expert content — promotional and regular publications in authoritative publications or blogs that are read by business owners in this industry. Then the funnel will look like this:
The first touch is an article in an expert blog or industry publication.
Visiting the site.
Researching product information.
Request for commercial proposal.
Product presentation or test access.
Transaction – invoice issuance.
The online sales funnel is different from offline. In online sales, you have to fight for the client more actively than offline: here he can quickly move from one site to another and compare prices online, request the necessary information through chats and immediately go to competitors if you let him down at some stage.
There is also a post-purchase funnel. For example, when recommendation systems in online hypermarkets offer products to a visitor based on his search and purchase history.
What data does a company’s sales funnel show?
Today, especially in internet marketing, everything is digital: at each stage of the funnel, you can see what results certain actions bring and adjust them online. With the help of web analytics , CRM and other tools, you can measure the conversion of the sales funnel, audience reach and other indicators.
With the help of a funnel, it is easy to see at what stage problems arise. These can be: ineffective advertising, a weak site, incompetent managers, a low-quality product or an inflated price.
For example, just yesterday it was a small online store of handmade wooden toys with 100 orders per month and revenue of 500 thousand rubles. But then it bought advertising from a popular blogger whose subscribers love everything natural and craft. As a result, 20 thousand new customers came to the site, ready to place an order. But the site engine was not designed for such a number of visitors, so it began to fail and give an error. Managers also did not have time to process orders, and couriers did not have time to deliver them on time. As a result, half of the customers were dissatisfied, cancelled orders and wrote angry reviews on social networks. To prevent this from happening, you need to assess the load in advance, even before the first stage of the funnel, and calculate how many resources you will need to process all orders.
One of the main metrics that internet marketers track throughout the funnel is conversion.
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How to increase conversion?
The conversion of a sales funnel is the percentage of those who went all the way to the end and made a purchase. If at the beginning of the funnel there were 10 thousand potentially interested users, and only 10 placed an order, then the conversion in this case is 0.1%. The conversion of each stage of the funnel is also measured separately and compared with the average indicators – to understand where the weak point is.
To increase conversion, you need to:
- Analyze each stage of the sales funnel and determine where the most customers leave. If 90% “drop out” at the contextual advertising stage, all investments in a good website and quality service will also not bring results.
- Work on weak areas: reconfigure advertising, improve the website and application form, train staff, or change the product itself.
For example, to place an order on the website, you need to fill out a form with 15 fields. The conversion at this stage is 30%, which is not that much, given the popularity of the product. When they decided to simplify the form and leave 5-7 fields instead of 15, the conversion increased to 50%. There is still some work to do here, but it is immediately clear that people are in a hurry to make a purchase and the long form filling scares them off. But the opposite may also happen: if you remove the address and phone number field from the order form, the conversion will drop, since it will be unclear how to contact the buyer and where to deliver the order.
- Regularly collect fresh analytics on the sales funnel, study the market and customer needs. There is no point in selling accessories and components for computers of a brand that has left the market or has been ousted by competitors.
A sales funnel is the most important tool in the work of an internet marketer. It helps promote products and services, bring in new clients and develop a business. There are principles and techniques of sales, but it is important to adjust them for a specific audience and product. In order for the funnel to perform its tasks, it is necessary to study the needs of clients and the market situation, regularly analyze the conversion of each stage, find weak points and work on mistakes.
