What is a sales funnel?

Sales Funnels Overview

A sales funnel represents a series of steps a customer follows from first becoming aware of a product to making a purchase, helping businesses understand and influence customer behavior at each stage. Here are some common types of sales funnels.

Classic Sales Funnel: AIDA

The classic sales funnel, based on Elias St. Elmo Lewis’ AIDA model, includes four main stages:

1. Attention: The widest part of the funnel, where a large audience becomes aware of the product or service.
2. Interest: Potential customers start showing interest, learning more about the product and comparing it with competitors.
3. Desire: The customer begins to feel a need or desire for the product, further narrowing down options.
4. Action: The final stage, where the customer makes a purchase decision.

The funnel becomes narrower with each stage, as people not interested in the product drop out. For B2B or complex sales, additional stages like sending quotes or drafting contracts may be included.

Content for Each Funnel Stage

Different types of content are useful for each stage of the funnel:

• Awareness: Informational content, such as problem-solving articles or infographics, to capture attention.
• Interest: Comparisons, testimonials, and educational content that outline benefits and solutions.
• Desire: Case studies or step-by-step guides that highlight product advantages and potential outcomes.
• Action: Special offers, clear calls-to-action, and checkout guides to help complete the sale.

Quality content at each stage nurtures potential customers, guiding them seamlessly through the funnel. However, a conventional funnel may not clearly define the actions needed to progress customers through each stage.

Sales Funnel Pitching

The pitching funnel is commonly used by sales novices. It has two main stages:

• Presentation: Presenting the product or service with a focus on benefits and competitive advantages.
• Objection Handling: Addressing customer objections without emphasizing their individual needs or interests.

This funnel approach focuses on describing product features and advantages to the customer and handling objections directly, often with minimal customization.

Transactional Sales Funnel

The transactional sales funnel is tailored to meet customer needs through active engagement. It is ideal for customers who know what they want but may need assistance with product selection. The process involves:

• Customer Needs Analysis: Understanding the customer’s requirements to recommend the most suitable product or service.
• Product Suggestion: Suggesting products that align with customer needs.
• Objection Handling: Addressing questions or concerns with an emphasis on the product’s relevance to their needs.

This funnel approach builds trust by aligning product recommendations with customer preferences, increasing the likelihood of a purchase.

Understanding and selecting the right sales funnel for your business can streamline the customer journey, meet customer needs at each stage, and optimize the conversion process, ultimately enhancing sales outcomes.

The Main Stages of Sales within the Transactional Funnel

• • • Identification of a Customer’s Needs: The salesperson asks questions about the product or service, its features, and selection criteria.
    • Product or Service Choice: Based on gathered data, the salesperson selects an appropriate option from those available.
    • Presentation of the Product or Service: The salesperson informs the customer about the chosen product or service, demonstrating that it meets their needs.

For proper identification of needs within the transactional funnel, the following questions are used:

• • • What would you like?
    • What kind of product are you looking for?
    • What properties would you want it to have?
    • What are your selection criteria?
    • How would the ideal situation be?

Consultative Sales Funnel

The consultative sales funnel is applicable when the customer requires a detailed consultation. The goal is to assure the customer that the salesperson is an expert willing to help them achieve the desired result, creating a feeling of mutual obligation and increased trust. This approach sells not only the product but also the added value of expert advice.

Stages of Sales in the Consulting Funnel:

• • • Specifying the Desired Outcome: Determine what the customer wants to achieve with the product or service.
    • Discovering an Excellent Way to Accomplish This: The salesperson helps the customer uncover the best method to achieve their goal.
    • Providing Technical Advice: The salesperson gives the customer information about the product or service that they cannot find independently.

In a consultative sales funnel, you cannot pressure the client. Communication should focus on caring for the client and fostering long-term, mutually beneficial relationships.

Needs Identification Scripts in Counseling Funnel:

• • • Why this one?
    • What kind of result would you like to get?
    • What do you need it for?
    • Do you have other alternatives too?

Value-Based Sales Funnel

The value-based sales funnel aims to highlight aspects of the product or service that align with the customer’s core values, convincing them that it holds high value in their area of interest.

Customer values are typically grouped as follows:

• • • Saving, Earning
    • Prestige, Status
    • Safety, Serenity
    • Positive Emotions

Sales Stages in the Value Funnel:

• • • Understanding Customer Experience: The salesperson learns how the customer has used similar products or services.
    • Uncovering Customer Values: Identify what values are most important to the customer.
    • Value Enhancement Opportunities: Find ways to enhance the values the customer prioritizes.

Value Identification Scripts:

• • • What have you used before? And how?
    • What did you like, and what didn’t you like?
    • Why did you make the change?
    • What happens if you don’t change the situation?
    • What are the losses without this improvement?
    • What are some contributing factors?

Sales Question Funnel

This funnel method uses a series of targeted questions to help customers reach the conclusion that they need your product. This approach is effective in niches where the customer has a recognized need but needs guidance to address it.

Stages of the Sales Question Funnel:

• • • Creating a desire to buy the product
    • Triggering a chain of sales questions
    • Building value through self-belief

Sales Question Funnel Scripts:

• • • Why did they come to us?
    • What would you like to see as a result?
    • What has been tried already?
    • Why wasn’t it working?
    • Why was that so difficult?
    • How has this problem been solved until now?
    • What’s going to be the solution to this problem?
    • What makes you think it’s going to work out now?
    • When are you ready to start?

Expert Sales Funnel

The expert funnel is used when demand is high, allowing you to choose which clients to work with. This funnel helps establish your expertise and position in the market.

Dominant Funnel Sales Stages:

• • • Budget Disclosure: Explain the budget upfront; if the client can’t afford it, don’t waste time.
    • Present Situation Description: Request the client’s current situation and explain how your expertise can improve it.
    • Guarantee Proof: Provide guarantees of improvement based on your expertise.

Content Sales Funnel

The content sales funnel aims to gradually warm up the customer’s interest in your product or service.

Stages of Sales in the Content Funnel:

• • • Subscription: Get customers to subscribe to your social media or newsletter.
    • Customer Warming: Share valuable content to build interest.
    • Conversion Action: Run an event, sale, or offer to convert interest into sales.

Agitated Sales Funnel

The hype funnel generates artificial demand and scarcity around your product or service, creating urgency to purchase.

Stages of the Agitated Sales Funnel:

• • • Creating a desire to purchase
    • Creating an artificial constraint (e.g., limited availability)

Examples include limited edition items, luxury products, or exclusive services with limited spots.

Trial Sales Funnel

This funnel allows the customer to try the product before purchasing, helping them realize their need for it.

Stages of the Trial Sales Funnel:

• • • Allow as many people as possible to try the product
    • Offer interesting trade terms to motivate a purchase after the trial

SPIN Sales Funnel

The SPIN funnel is designed for long sales cycles or high-value deals. It focuses on identifying customer problems through a structured questioning approach.

SPIN Sales Stages:

• • • Preparation: Research potential customer problems that your product could solve.
    • Meeting: Establish trust and uncover customer problems through situational and clarifying questions.
    • Pre-presentation: Explore solutions together to see if your product can help.
    • Commercial Proposal: Prepare a detailed contract and review terms with the client.
    • The Deal: Finalize and sign the contract.
    • Payment of Bills: Complete billing and payment processes.

This SPIN approach emphasizes building a deep understanding of the customer’s pain points before presenting your solution. By following this structured sequence, the salesperson helps the client to see the value of the product as a solution to their specific needs.

Conclusion

Each sales funnel has a unique approach suited for different types of customers and sales scenarios:

• • • Transactional Funnel: Ideal for straightforward needs-based sales, where the focus is on matching a product to the customer’s criteria.
    • Consultative Funnel: Best when the customer requires expert advice and a personalized approach, building a trust-based relationship.
    • Value-Based Funnel: Effective for customers who value added benefits like savings, status, or emotional satisfaction, beyond just the product itself.
    • Sales Question Funnel: Useful in markets where customers have a recognized need but require guidance to take the final step towards a purchase.
    • Expert Funnel: Appropriate for industries with high demand and where the seller holds a dominant market position, emphasizing expertise and value.
    • Content Funnel: Works well when warming up customers over time through content and relationship building.
    • Agitated Funnel: Effective for products or services that benefit from urgency and exclusivity, encouraging quick action.
    • Trial Funnel: Great for products where a hands-on experience can help convert interest into commitment.
    • SPIN Funnel: Especially suited for long-term sales processes that require in-depth problem solving and relationship building.

Understanding the unique aspects of each funnel allows salespeople to select and adapt the best approach to fit the specific needs and expectations of each customer. Mastering these funnels can lead to higher sales conversions and stronger customer relationships.

Just as with the classical sales funnel, the path of the buyer—from initial contact with a salesperson to the final transaction—can involve as many stages as necessary. The key is to formalize each process and evaluate every step for its effectiveness.

Monitor Your Sales Funnel in CRM or Excel

The sales funnel is more than a formalized guide for sales actions. It’s an essential tool for tracking sales performance, enhancing methods, and managing staff. Encourage your sales team to log every movement of potential customers through the funnel, and set up regular report generation and analysis to maintain visibility.

While general customer conversion rates can be tracked with a sales funnel, using a CRM system provides additional insights, such as:

• General information on all sales transactions by each manager.
• The specific stage of each transaction.
• Salesperson performance dynamics and predictions for performance benchmarks.

The flexibility of the sales funnel allows for continuous improvement. Keep all processes under close observation, identify conversion bottlenecks, and adjust as needed.

Identifying Conversion Issues

For example, if conversion rates decrease significantly during product presentations, consider testing these hypotheses:

• Managers may not be listening to customers closely enough—review CRM conversation recordings and correlate this data with presentation outcomes.
• Salespeople perform well on calls but may struggle in face-to-face meetings.
• Some buyers may have budget constraints—consider offering lower-cost introductory products or installment payment options.

Effectiveness of the Sales Funnel

Utilizing the sales funnel can subtly attract and adapt to customer needs. Its effectiveness depends on factors like pricing strategy, promotions, target audience, loyalty, and marketing methods.

In practice, metrics such as the number of cold contacts, interested prospects, and actual buyers help pinpoint product “hits.” Increasing the transaction volume and the average transaction value signals effective sales work.

Stages of Building a Sales Funnel

Sales funnels vary by business but generally follow these universal rules:

• Each funnel is designed for specific customer acquisition channels.
• Each stage has clear boundaries and specific actions associated with it.
• The non-linear customer journey should allow for potential returns to previous stages.

Depending on the business, common stages include:

• Offer Composition: Highlight the uniqueness, benefits, and advantages of your product over competitors.
• Customer Attraction: Use methods like cold calling, email marketing, digital advertising, and social media to reach potential clients.
• Generating Interest: Effectively create interest in your offer to secure higher conversion rates.
• Overcoming Objections: Address and counter objections to convince the customer of their choice.
• Closing the Sale: Finalize the transaction with the customer.
• Analyzing Results: Calculate the conversion rate and identify ways to improve it.

Setting Milestones

A “from simple to complex” funnel means that the funnel structure is refined over time, with unnecessary stages removed. Each company will have its own unique funnel stages, depending on their business segment. Typically, the structure is built by identifying key customer contact points, usually where decisions or transitions occur.

Complex processes should be positioned toward the end of the funnel to filter out early those who are not genuinely interested in purchasing.

Measure Key Metrics

The funnel must remain full at each stage. If resources are limited, simplify the funnel to essential steps, like: “Engaged,” “Interested,” “Purchased,” and “Repeat Purchase.”

Segment analysis is also important. For example, analyzing the funnel by customer segments, target audience, product category, and sales channel helps identify what works best and where improvements are needed.

Improving Sales Performance

By tracking and analyzing funnel metrics, you can improve lead generation, enhance skills, and optimize products or services. Neglecting funnel analysis could mean missing business objectives or expending excess resources.

Excel can be a useful tool for visualizing the funnel stages and displaying data as reports.

Example Sales Funnel Structure

A sales funnel could look like this:

• Cold Call
• Commercial Offer
• Product Presentation
• Contract Conclusion
• Invoicing
• Payment

Conversion Analysis

The sales funnel serves not only to boost income but also to evaluate firm-wide performance. This helps pinpoint where customers drop off, allowing for targeted actions to improve conversion rates.

For example, conversion can be calculated with a formula:

1,000 callers / 10,000 ad views x 100% = 10%

The New Psychology of Sales

The classical sales model has evolved. Today’s customers want fast, comprehensive information. As a result, traditional needs analysis has been simplified to focus on two main points: the customer’s past experiences and desired outcomes with the new product.

Product Presentation

Since customers often conduct research before interacting with sales, the salesperson’s role is to confirm that the chosen product meets the customer’s needs.

Handling Objections

Whereas handling objections was once a central focus, the modern approach is to allow customers to reach decisions independently by addressing concerns during the presentation stage.

Closing the Deal

Pushy closing tactics are now seen as counterproductive. Instead, the goal is to support the customer in making an informed decision, minimizing the chance of negative feedback and avoiding pressure on the customer.

Modern Consumer Behavior

Consumers today are choosers, looking for the best place and way to make a purchase. The role of a salesperson is not simply to sell, but to guide customers in making the best choice for their needs.

Overcoming Customer Objections

The most critical mistake when handling objections is to wait for them to arise. Objections can often be anticipated and addressed in advance, before the customer raises them. An objection is a sign of a weak point in either your product or your sales process. For example, if a customer often says, “I’ll think about it,” it means they lack a sense of urgency to make a decision. If they frequently comment, “It’s expensive,” it indicates they don’t see the value in the offer.

The solution lies in your presentation. This is where you explain why it is beneficial for the customer to make a decision right away, and why the product’s value corresponds to its price. Your goal should be to build the case for immediate action and demonstrate the value proposition clearly.

Common Mistakes in Objection Handling

The second common mistake is addressing objections in an unsystematic manner. To avoid this, create an “Objection Map”—a guide that includes the most frequent objections and strategies for handling them. Managers can then refer to this map to handle objections in a structured way, ensuring consistency and improving response times.

Additionally, it’s essential to remember that working with objections isn’t about defeating the objection itself but understanding the situation behind it. Rather than trying to change the client’s mind immediately, your task is to clarify the objection, understand its root cause, and neutralize that underlying concern.

Focus on the Process, Not Just the Result

The modern approach to sales emphasizes focusing on the process rather than the result. A well-structured sales process yields better results over time. Focusing solely on the outcome can lead to a “mental trap,” where you chase after 100% success in every deal—an unattainable goal. Success comes from refining and improving the process, not by fixating on each individual sale.

In challenging times, such as during an economic crisis, many companies adopt a passive approach, withdrawing and waiting for better times. However, crises often create opportunities. By staying active and leveraging these conditions, businesses can thrive. Instead of retreating, proactive sales teams can target customers who are shifting from passive to active providers, thus improving their own sales performance. The crisis, if handled correctly, can lead to growth and new opportunities.

The Power of Sales Funnels

Sales funnels are effective tools for boosting sales. By choosing the right funnel and adapting it to your business, you can significantly increase customer engagement and drive higher sales. Tailoring your funnel stages to your specific market will allow you to target the right leads at the right time, and ensure higher conversion rates.

How Does Crowdy Chatbot Boost Sales on Your Website?

A chatbot is a modern tool for lead generation, designed to meet the needs of your customers while enhancing the user experience on your website. With a chatbot, you can expect to generate more leads than through traditional methods. The exact increase depends on factors like your industry, website usability, and company reputation. However, on average, businesses can expect a 30% increase in leads when using a chatbot. This boost translates into a 30% higher conversion rate at the Interest stage of the sales funnel.