March 25, 2022

The Fundamentals of the Sales Funnel Theory

The sales funnel theory was developed based on establishing a professional relationship with each customer. Every contact you make with a prospect or existing customer should be a win-win situation that leads to their sale. It's vital to articulate how your product or service solves its problems in the most persuasive way possible.

What Is a Sales Funnel?

Businesses use the sales funnel to understand and visualise the customer journey from initial awareness of a product or service to eventually becoming a paying customer. The idea is that businesses can more effectively market to and sell to customers by understanding the different stages customers go through when making a purchase.

There are typically four stages in a sales funnel: awareness, interest, decision and action. Awareness is when the customer first becomes aware of the product or service. Interest is when the customer starts to learn more about the product or service and begins considering whether or not it's something they need or want. The decision is when the customer decides whether or not to buy the product or service. And action is when the customer makes the purchase.

Of course, not every customer goes through all four sales funnel stages.

Sales Funnel vs. Sales Pipeline

Sales funnel and sales pipeline are terms often used interchangeably, but they refer to two different things.

So what's the difference between these two terms?

Simply put, a sales pipeline focuses on your brand, meaning it examines what marketing and sales departments should do to move prospects to become customers. A sales funnel, on the other hand, considers the entire customer journey. In short, it focuses on the consumer, taking into account the various stages of the purchasing process.

The Customer's Journey: Sale Funnel Stages

With the acronym AIDA, you can easily remember the 4 stages of the sales funnel.

1.      Awareness

The awareness stage of the sales funnels is when potential customers first become aware of a problem or need. They are not yet looking for solutions or products at this stage, but they are starting to realise that they have a problem. This is usually the result of some trigger, such as seeing an ad, reading an article or hearing about a product from a friend. Once potential customers are aware of their problem, they will begin researching solutions and comparing products.

Most often, the awareness stage resembles a courtship. The goal is to entice the prospect back to your website and encourage more interaction.

Why is the awareness stage crucial?

The awareness stage is essential because it is the first step in the sales funnel, where potential customers become aware of a problem or need. This is where your product or service comes into play as a possible solution to their problem.

If you can capture the attention of potential customers in the awareness stage and get them interested in your product or service, you’ve already done a lot of the hard work. The rest of the sales funnel will be much easier because you’ve already established a relationship with the customer and they are considering your product as a possible solution.

Please don't underestimate the importance of the awareness stage; it's crucial to generating leads and making sales down the line.

2.      Interest

The interest stage is when once a potential customer is aware of a product or service, they will begin to research it to see if it is a good fit for their needs.

During the interest stage, companies need to provide potential customers with information about their product or service. This can be done through website content, blog posts, social media posts or even infographics. The goal is to educate the potential customer about what the product or service can do for them and why it is a good fit for their needs.

Building relationships with potential customers during the interest stage is also essential.

Why is the interest stage crucial?

The interest stage is vital for a number of reasons. This is your opportunity to make an excellent first impression. Secondly, it is when customers begin to form opinions about your product or service. If they are interested in what you offer, they will start researching and reading reviews. This is your chance to build trust and credibility with potential customers.

3.      Decision

The decision stage is when the customer makes a decision about whether or not to purchase the product.

To make a successful sale, businesses must ensure that they provide their customers with all the information they need to make an informed decision. You can do this by using marketing emails, product comparisons, customer testimonials, special offers or a free trial. There are several factors that can influence a customer's decision at this stage, including product features, price and brand reputation.

Once a customer has decided to purchase, they will enter into the final stage of the sales funnel: the action stage.

Why is the decision stage crucial?

This is a vital stage in the sales funnel because buyers evaluate their options and decide which product or service to buy. Making sure that your product or service is positioned well in the decision stage is essential for closing sales and achieving success in your business.

4.      Action

Purchasing is the focus of this stage. The final stage requires content such as case studies, information sheets and testimonials. You should always end your content during this stage with a solid call to action.

In addition, customers must say yes as easily as possible. It shouldn't be a hassle for them to make a decision. When people can conveniently complete the purchase process, they are more likely to repeat the process and make more purchases.

Why is the action stage crucial?

The action stage is important because it's when the buyer takes action and makes a purchase. This is the most critical part of the sales funnel, and if done correctly, it can result in a lifelong customer.

To ensure buyers take action, businesses need to create a sense of urgency and provide an incentive for taking action now rather than later. This could be in the form of a discount, limited-time offer or free shipping.

Once a buyer takes action, it's important to follow up with them through an email or phone call to ensure they're satisfied with their purchase. Businesses can turn one-time buyers into loyal customers by following up with buyers.

Boost Your Sales Funnel with Quality Leads

It takes time and effort to build and optimise a sales funnel. Boost your sales funnel with a steady stream of leads and prospects through Linked Hacker.

Linked Hacker can help grow your business by generating leads. Contact our team to learn more.  

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