What is a sales funnel?
Sales funnel is the process companies use to convert prospects into sales. It starts with a potential customer becoming aware of a product and then involves several steps to make the final sale. In the b2b context, it involves monitoring contracts and steps to increase b2b sales.
How sales funnels work
Marketing: Awareness and interest
Sales funnels start with marketing. Through advertising or some other marketing tool, a customer becomes aware of the availability of a product and an initial interest in purchasing a product is generated.
Before making a decision to purchase, prospects will likely go to the marketplace to compare pricing and product features. Once a final decision is reached, prospects will purchase or with a b2b transaction enter into negotiations to purchase.
For b2b transactions, the funnel includes steps to re-evaluate contracts and to expand potential business with b2b customers. Customers will have their own processes in place to evaluate contracts and decide if they want to renew.
Why sales funnels matter
Understand your customers
Sales funnels force companies to better understand the marketplace and their customers. They must think about what attracts potential customers to their products and how they can convert the attraction to sales.
Sales funnels break the sales process down to stages, which allows for more deliberate interactions with potential customers and also, potentially, automation. They help companies better define the content they use to connect with potential consumers.
Sales funnels help keep potential customers away from the competition by holding their hands throughout the journey. They force companies to think with a high-touch mentality that prevent customers from looking elsewhere for the products they want.