The Complete Sales and Marketing Funnel, Explained

How the sales and marketing funnel works, and why you need to pay attention to it.

Recently, we’ve spent a lot of time talking about the sales funnel - what it is, what the different stages are, how to automate your funnel, and how to use content at the various different stages.

Today, I’d like to take a closer look at how and why a sales and marketing funnel works. To understand that, we’ll need to go through the stages and break each one down.

Stage 1: Awareness

Purpose of this stage: to attract

The first stage of the sales and marketing funnel is the awareness phase, and this is the stage during which you attract potential customers to your company. The entire purpose of this stage is to make sure that:

  • People who have never heard about your business hear about it

  • People who have heard of your company in the past are made aware that you still exist

  • Potential, former and current customers are aware of your product and service range

  • All customers get to know about specific campaigns

This is a fairly broad stage of the funnel - the top of the funnel. You will attract the attention of plenty of potential customers, but not all of them will progress through to the next stage. There are a few reasons for this.

It could be because they don’t need a product or service like yours, but they might need it in the future. This kind of customer will hang out in the top of the funnel for an extended, but indeterminable length of time. To get them moving to the next stage, you might want to create a need or an urgency for the product or the specific campaign.

It could also be because they get this product or service elsewhere, in which case you would ideally like to attract them away from their current provider and draw them to you. You can do this by increasing awareness of your brand, but also by putting out details of your culture, what makes you special, and why your product or service is superior.

Don’t expect everyone who falls into this stage of the funnel to get to stage 2, though. There are hundreds of reasons why they might not ever buy from you, and you cannot challenge every single one. The purpose of the funnel is to filter out the people who won’t be customers, and to channel hot leads into your sales engine.

Reduce fall-away here by targeting specific demographic groups - people who are more likely to be interested in your offering. This can be fairly broad for general purposes, or more narrow for particular campaigns.

Stage 2: Interest and investigation

Purpose of this stage: to convert

At this stage, you have a fairly large pool of people who are interested in your product or service and are trying to decide whether it’s worthwhile doing business with you. This is a critical phase, because this is the stage during which most of the content you produce will be scrutinized. This is where everything about your company gets laid bare and evaluated for its merit.

During this stage, people will investigate some or all of these factors, as well as many others:

  • Product or service value: People want to know they are getting value for their money, so they will look at independent reviews and feedback on your social media to find out if other people are happy with what they got.

  • Social responsibility: Fewer and fewer people are willing to work with companies that have a bad track record in the social arena. That can mean anything from something as serious as human or animal rights practices, to how active you are in your community.

  • Authority: Even if you aren’t the biggest or carry the widest range, do you know your product or service backward? Can you answer all the weird, random questions people ask? Do you have a solid FAQ section on your website to make sure people can get all the info they need?

  • History and brand: Where does your business come from? How was it established? Who are you and what makes you special? People value an honest understanding of how your business came about and what it believes in.

  • Pricing: This is an important part of the process if you are competing on price point, in which case make sure people can find your pricing information easily.

Not everyone is going to like what they see, and there’s no way to be certain of who is going to bow out at this stage. However, you can maximize your interest response by creating good buyer personas and understanding your market more closely. This can help ensure you are providing the right information, presented in the right way.

Stage 3: Decision

Purpose of this stage: to create intent

Your customer that gets through to this stage has already invested quite a bit of time and energy into their future purchase and will have narrowed it down to just a couple of providers. They may even have narrowed it down to just you, and are choosing whether or not to go ahead with the purchase. People can remain in this stage for anywhere between a few minutes and several months, depending on:

  • How urgently they need the product or service

  • Affordability and where it fits into the budget

  • Where this product or service falls on their priority line

You can help move them along by making sure they have everything they need to make the decision easier, and to make it is as easy as possible to purchase. Creating a sense of urgency can also help propel people through this stage.

Stage 4: Action

Purpose of this stage: to sell

This is the stage you’ve been driving people towards, and this is where the action happens. Your customer has made a purchase, placed and order, come to your store or engaged your services. The primary goal of this phase is to deliver the product or service quickly, accurately and to the level of quality you have promised.

This, however, is not the final stage of your funnel, so it needs to be treated with as much care as all the previous phases. Ideally, you want customers to come back and buy more, so you don’t want to have people at this stage shoot through the funnel and disappear. You want to filter them into your pool of repeat customers, where you can nurture them, instead of channeling them through the funnel every time.

You may lose a few of your customers here. Reasons can include:

They really only needed your products or services once - This can happen quite easily with very specialized businesses that offer a small range of products or a single service.

They were dissatisfied with the product - For whatever reason, they were not satisfied. You can work on this type of customer with great after-sales follow-up and problem management, but some will fall away.

They were unhappy with the service - This could be your service, or it could be a third-party supplier who messed up, like the delivery company, for example. Whatever you can do to rectify the problem, you should do, but again, some people may simply walk away here.

Stage 5: Repurchase

Purpose of this stage: to maintain a happy customer base

Your customers that get to this point are gold. They now know your company, have investigated it thoroughly, are happy with the products and services they received, and are going to keep using you. They are the endpoint of the funnel… well, kind of.

A plastic funnel in your kitchen or garage doesn’t simply disgorge its contents all over the floor, and likewise, your sales and marketing funnel needs to channel these repeat customers into a new phase - secondary funnels.

Secondary funnels come into play with customer nurturing and repurchase by offering existing customers something new. These are people who you will get in touch with about special offers on complementary products and services, or encourage to broaden their use of your company. You don’t want to always be selling here, though. You also want to create an environment where you are simply being in touch with customers, letting them know you value them, giving them something extra.

What else would you like to know about the sales and marketing funnel? Let us know in the comments.

Need help developing buyer personas and automated funnels? Get in touch.

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