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How Marketing Sales Funnels Work: The Complete Guide

By: Compose.ly — April 29, 2020

A robust marketing strategy is the key to a successful and profitable business. Whether you’re selling products to consumers or providing services for companies, it’s crucial that you grow and nurture your leads.

One of the most effective ways to convert prospects into customers is to use a marketing sales funnel. This powerful tool lets you make informed decisions that greatly benefit your business. Without understanding and incorporating a sales funnel, you will lose many potential customers without even realizing it.

Here’s a complete guide that will answer what a marketing sales funnel is, how it works, and why your business needs one.

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What is a marketing sales funnel?

A marketing sales funnel is the step-by-step process by which leads become customers. It’s the journey a customer takes from initial awareness of a business to action.

The process is called a “funnel” because, when represented visually, the diagram is wide at the top and narrows with each succeeding step:

  • The top of the funnel represents your range of potential leads or prospects.
  • The funnel starts wide as you get word out about your business, brand, product, or service to as many people as you can.
  • Not everyone who learns about your business will bite. As the number of prospects shrinks, the funnel narrows.
  • Each stage is one step closer to your ultimate goal—a measurable action such as a product purchase that turns a lead into a customer.

How a Marketing Sales Funnel Works

Let’s walk through the marketing funnel stages and discuss the differences between a B2C and B2B sales funnel.

The Marketing Funnel Stages

There is no single standard marketing and sales funnel. Some businesses model their funnels using four stages, while others break their funnels down into six. For simplicity, we’ll review what’s known as the “AIDA funnel”—AIDA stands for Awareness, Interest, Desire, and Action.

1. Awareness

The first stage of the marketing funnel is awareness, where prospects first learn of your brand, product, or service. This is where businesses cast a wide net and get the word out to as many people as possible.

You’ll need a strong outbound marketing strategy at this stage. Some ways businesses generate awareness include:

  • Billboards
  • Print advertising
  • Radio or TV spots
  • Traditional media mentions
  • Search engine optimization (SEO)
  • Pay-per-click online advertising
  • Sponsorships with social media influencers
  • Displays at trade shows and other events

The more people hear about your brand or offering, the more likely you’ll have customers.

2. Interest

The second stage of the sales funnel is interest. At this stage, leads decide to seek out more information about your brand, product, or service. Potential customers often run a Google search, browse your website, or search for your brand or company on social media.

This is where inbound marketing comes in. You can incorporate several strategies at this stage:

If your leads are interested in the content you put out, they’re more likely to move to the next stage of the funnel.

3. Desire

At the desire stage of the marketing and sales funnel, there is an emotional connection between you and your potential customer. After showing interest in your brand or its offerings and doing some initial research, some leads will decide they like what they see and move to the desire stage. A prospect at the desire stage might:

  • Follow or subscribe to your social channels
  • Share or engage with your content
  • Sign up for your email newsletter
  • Get in touch with customer service to ask questions about your company offerings
  • Favorite a product or add it into their cart for later

As a marketer, you’ll want to continue fostering desire. Here are some ways to do that:

  • Continue putting out high-quality social media content.
  • Respond to people’s questions, feedback, or comments in a timely fashion.
  • Send promotional emails and text notifications with discounts and sales.

Give your potential customers all the information they need to take action.

4. Action

The last stage of the sales funnel is where your lead takes the final action and becomes a customer. This may be purchasing a product or signing up for a service.

Move your potential customers to action by:

  • Offering a specialized discount
  • Sending abandoned cart follow-up emails
  • Using strong calls to action

In general, you want customers to have an easy time moving through your sales funnel. Remove roadblocks and points of friction for the customer. Keep note of and solve problems that arise along the way to ensure that all your potential customers have a clear path to action.

The B2B Sales Funnel

Sales and marketing funnels traditionally explain B2C interactions. However, with a few tweaks, they’re useful for B2B marketing as well.

Here’s a few points to keep in mind for a B2B sales funnel:

  • In a company, most decisions are not made by a single individual, but by a group. There may be multiple people working their way through your marketing funnel at one time.
  • Certain marketing decisions make more sense in a B2B funnel. For instance, the awareness stage might involve trade show displays instead of targeted online advertisements.
  • In B2B marketing, there are more opportunities for company representatives to chat one-on-one with prospects. This might be through cold calling, product demonstrations, etc. Be sure to use these moments to your advantage at every relevant stage.

Why Your Marketing Strategy Needs a Sales Funnel: 3 Reasons

According to a survey from Salesforce, 68% of companies have not identified or measured their marketing funnel. The same survey found that 79% of their prospects never converted into sales.

If your marketing strategy doesn’t include a sales funnel, you’re missing out on:

  • Opportunities to grow and nurture your leads.
  • Key performance benchmarks that indicate strong and weak areas of your strategy.
  • Long-term data driven decisions that yield amazing results.

Not convinced? Here’s four ways your marketing strategy can benefit from a funnel.

1. You’ll have a comprehensive picture of your marketing plan.

It’s all too easy to get caught up in the minutia of marketing decisions. The process of determining a marketing strategy can be overwhelming and lead to haphazard choices that don’t align with business goals. A funnel lets you take a step back and see your plan for what it is.

When you observe your marketing strategy through the lens of a sales funnel, you’ll notice exactly how your decisions and processes fit—or don’t fit—into the overarching goal of turning leads into customers.

2. You can critically evaluate and improve your marketing process.

By reviewing your marketing methods at each stage of the funnel, you will find what works well for your business.

For example, perhaps you discover that specific social media marketing strategies at the desire stage are very effective at convincing prospects to buy. According to Hannah Pilpel of MADE.COM, customers who arrived at their site from social media posts had average order values 4% higher than the site’s average back in the first quarter of 2016. Without a structured way to evaluate your marketing strategy, such as a marketing funnel, you will miss these crucial insights.

A sales funnel will also help you identify where your marketing strategy needs improvement. For instance, abandoned shopping carts account for $1.8 trillion in lost revenue every year. U.S. footwear retailer Boot Barn implemented a three-part email marketing campaign retargeting abandoned cart shoppers. This strategy resulted in a 12% lift in captured revenue.

3. You’ll understand the sales and marketing process through the eyes of a customer.

Marketing decisions are all too often made based on what companies think will work as opposed to what actually does work. A sales and marketing funnel provides a unique opportunity to look at your sales strategy through the eyes of a potential customer.

96% of people who view your site have yet to decide on a purchase. Follow their journey through your sales funnel and see how your marketing efforts impact their decisions. Find ways to nurture leads through the process—nurtured leads tend to make 47% larger purchases than non-nurtured leads.

When you get a clear view of your marketing strategy through the eyes of your prospects, you’ll be able to make smart decisions that benefit both your potential customers and your business.

The Takeaway

A marketing sales funnel is an invaluable tool for your business. Without a funnel in your marketing plan, you’re missing out on critical opportunities to grow your business and nurture leads. But even with the simple AIDA framework, you can:

  • Develop powerful strategies to turn prospects into customers.
  • Get a clear picture of your customer’s journey to determine where you can make improvements to your marketing strategy.

Take advantage of the sales funnel to build a marketing process that reliably builds your list of prospects and converts them into customers.

This article was written by Compose.ly writer Elizabeth McDade.


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