Published: July 31, 2017
Funnels come in many forms. There are funnel cakes, those tasty deep-fried carnival treats sprinkled with sugar. There are funnel clouds -- ominous precursors to tornados that reach down like tentacles from the sky. And then there are, of course, funnels themselves: tools used for guiding a liquid or substance into a small opening.
We can easily picture these things in our minds. But a sales funnel is far more ambiguous.
What is a Sales Funnel?
Chances are, you’ve seen this theoretical construct depicted in any number of different ways. The sales funnel definition and specifics can change quite a bit based on your source, and too many organizations have failed to clarify parameters internally. A while back, MarketingSherpa found that 68 percent of B2B organizations had not defined their own sales funnel.
Sales funnel refers to the process that brings a customer from discovering your product or service to completing a purchase. This framework is useful because, by dissecting and better understanding the model, marketers and salespeople can more effectively map their strategies and influence outcomes.
“Before you even launch your sales funnel, the number one priority you should focus on is building your customer avatar. Finding out whom your ideal customer is that you want to sell to, is the key differentiator between building a sales funnel that converts, and one that doesn’t.” - Stephen Esketzis (source)
Fundamental to this abstraction is the idea that an individual reacts differently to particular content and messaging at different points along the way. Today’s most effective sales and marketing teams are accurately identifying a buyer’s mindset based on the stage, and tailoring their sales funnel management for maximum impact.
Let’s break down those stages, and why they matter.
Sales Funnel Stages
This is where we start to come across some variations. The composition of the sales funnel can be illustrated in many distinct ways. Here are a few different visualizations:
This simplified breakdown from HubSpot is easy enough to follow and understand. A prospect visits your website or content piece, then becomes a lead after taking some specific trigger action (email capture, form fill, etc.). There are then two levels of lead qualification, with the standard a bit higher for sales than marketing. Finally, after nurturing through education and follow-ups, the prospect becomes an opportunity ready to (hopefully) convert.
This illustration is helpful because it attaches (albeit highly generalized) conversion probabilities at each level of the funnel. This gives us another way to wrap our minds around how the process evolves while prospects move further down the funnel, though in this case the model doesn’t really align to specific content or strategies.
(Source: Steve Patrizi)
This colorful sales funnel example includes many of the buzzwords that are widely used in discussions on the topic (e.g. Awareness, Consideration, Evaluation) and attempts to divide the funnel structure up by the roles of marketing and sales. Patrizi suggests that today’s salespeople are now more engaged when buyers are deeper into the purchasing funnel, although (as you will read below) there are many ways for sales to remain actively involved with generating and nurturing leads.
While they each have their own characteristics, by and large, these varying models all follow the same basic structure:
Top of the Funnel
Also known as: Awareness, Discovery, Prospecting, Lead Generation
This is the initial point of interaction between a potential buyer and your brand. It represents your opportunity to make a strong first impression, which hopefully carries them into the next stage. Traditionally, top-of-funnel activity is categorized in the marketing realm, although today more and more salespeople are taking an active role in this component.
How to successfully populate the top of your sales funnel with qualified candidates? Develop strategies that catch people while they are researching a problem your product or service solves.
Social media marketing
Example of Top-of-Funnel Success
The HubSpot blog is a tremendous source of information for sales pros and marketers. The company regularly writes on subjects with search visibility and a trending factor. Within the content -- usually toward the end, but sometimes sprinkled throughout -- you will find strong call-to-actions intended to move users further into the funnel. For example, the bottom of this recent blog post on the impact of AI and big data in marketing features a link to gated content, as well as two email opt-in offers (one pop-up, one at the bottom of the article). Growing your email list is among the most crucial top-of-funnel activities.
Middle of the Funnel
Also known as: Consideration, Interest, Evaluation, Desire, Nurturing, Qualification
This critical stage aims to move a prospect from awareness to purchase, through myriad strategies intended to educate, nurture, and persuade. In the B2B sales funnel, there is no juncture more pivotal, and so many companies pump significant resources into optimizing practices here.
The objective is to demonstrate why your option is superior when weighed against alternatives. If a prospective buyer is in this stage, you know there is a real opportunity because they have moved past cursory browsing and perusal. At this point, it is vital for sales and marketing to align.
Informational phone calls
Example of Middle-of-Funnel Success:
Bynder, a digital assets management company, created a fun low-barrier eBook titled “Digital Asset Management for Dummies” in partnership with publisher Wiley, aiming to reach a targeted segment with clear interest in being educated on their field of specialty. Through a paid social campaign, they were able to refine an audience, drive downloads, and collect data for follow-up. This is an excellent example of using relevant content to generate warm leads, which then closed at a relatively high rate.
Bottom of the Funnel
Also known as: Action, Decision, Purchase, Conversion
Crunch time. The buyer is ready to make a commitment. Will they choose you?
The final stage of the funnel is where you make your closing argument. If sales hasn’t grabbed the torch from marketing already by now, they certainly do so here. Not only is this your chance to close the deal and ring the bell, it is also an opportunity for the salesperson to gain referrals by delivering a positive buying experience.
Example of Bottom-of-Funnel Success
Free trials are great for removing the payment barrier and allowing someone to experience your product, especially for something like a SaaS subscription. The more obstacles you can remove, the better; studies show that more people sign up for a trial when no credit credit information is required, or it is clearly explained they won’t be billed automatically. Additionally, you can incentivize referrals while a person is signing up, as Dropbox did in the example below:
Sales Funnel vs. Sales Pipeline
Today these terms are mostly interchangeable. However, it bears noting that “sales funnel” is a problematic concept in the eyes of many reps, because it represents a numbers game that -- to some -- doesn’t necessarily reflect reality.
It is all well and good that a certain percentage of prospects typically convert from awareness to consideration, and from consideration to purchase. But in the field, those cohorts are not always useful. The sales pipeline historically correlates more with a set of seller actions.
A post from Social Media Today did a nice job of drawing out the contrast between funnels and pipelines, framing them as two sides of the same coin. But, that post is also from 2009, and you won’t find many recent pieces differentiating the two. This goes to show how outdated such distinctions are.
The principles of sales funnel management and sales pipeline management are essentially the same: Align your processes with engaging prospects strategically throughout the buyer’s journey.
How Sales Can Supplement the Top of the Funnel
“Due to the recent digital revolution I will even go as far as to proclaim that every lead is now an Internet lead. We’re all online, every day all day. The world is changing, and your strategies need to change along with it. We look at Facebook on our phones more than we look at each other in the face. Regardless of whether they submit their information through a web form on your website or not, every human is now conditioned to look online before making a purchase. And thanks to our social media addiction you can now generate demand, not just fulfill it.” - Chris Smith, The Conversion Code
One of the earlier sales funnel models assigned marketing with responsibility for every stage of the funnel above evaluation and purchase. This is how many organizations operate. But today’s most successful sales pros are taking action to supplement the top of the funnel on their own and autonomously create more leads.
This is why social selling is rapidly proliferating. When salespeople take an active role in reaching out and building connections through these channels, the opportunities tend to multiply. It’s especially true in the world of B2B, where buyers are almost always active on social media. This strategy doesn’t necessarily need to occupy a great deal of your time or energy. Here are a few quick and easy steps that can help you fill the top of the funnel:
Write a weekly blog on your area of expertise
Optimize your social media profiles
Connect with influencers in your field on LinkedIn and Twitter
Identify prospects through keywords and hashtags, then follow them
Post frequently about pain points and challenges faced by your typical customers
“To succeed in sales, simply talk to lots of people every day. And here’s what’s exciting — there are lots of people!” - Jim Rohn (source)
A Clearer Picture
Hopefully this overview has helped clear up a subject that sorely needs a little more clarity in sales and marketing. Here are the biggest takeaways you should take with you:
- The specifics can vary when it comes to differing models and frameworks for the sales funnel, but the basic structure is always the same. A successful funnel is one that robustly populates the top end, moves prospects through the middle with strong nurturing and follow-up, and finishes with strong conversion mechanisms.
- It’s time to move past the mindset where marketing and sales are disparately responsible for different portions of the funnel. High-performing organizations will have overlap and collaboration throughout, with sales helping to generate leads and marketing helping to close deals.
- Sales pros can do much to help themselves by expending even modest effort to supplement the top end of the funnel. More opportunities means more deals, especially if those opportunities are targeted. With so many social selling tools and strategies at your fingertips, you now have more power than ever to individually influence the funnel at every stage.
Understanding the sales funnel, and how to optimize throughout, is crucial to succeeding in the modern selling environment.
More from around the web:
- Definition of the sales funnel/sales process/buying cycle - RingDNA
- 17 Best Sales Funnel Examples to Help You Convert More Customers - Autogrow
- The Beginner’s Guide to Building a Sales Funnel - MailMunch
- Sales Funnel Tips & Tricks Everyone Can Use - InfusionSoft
- Guide to Building an Automated Selling Machine - Entrepreneur
- What’s a Sales Funnel, and How Do You Create One? - QuickBooks
- What Does a Profitable Social Media Sales Funnel Look Like? - Neil Patel