What is a Sales Funnel and How Do I Use One?

by | Marketing

One of the most important things for you to understand as a small business owner is how the marketing process works, especially in respect to the digital landscape.

But despite the growing number of younger entrepreneurs and the widespread reach of the Internet, I talk to small business owners all the time who are confused and even clueless about how digital marketing works.

This can become very problematic, especially if you are a new business owner trying to grow your business in a timely fashion and get things off the ground.

At the very core of this marketing process is a very useful tool called a sales funnel. And while some version of this has existed for quite some time now, it remains the most effective way to get into the line of sight of your potential customers and convert them in the future.

What is a Sales Funnel?


So what is this thing anyway?

RingDNA defines the sales funnel, in depth, like this:

“The definition of the sales funnel (also known as a revenue funnel or sales process) refers to the buying process that companies lead customers through when purchasing products. A sales funnel is divided into several steps, which differ depending on the particular sales model. One common sales process is divided into seven phases including:

  • Awareness Phase – in which prospects become aware of the existence of a solution.
  • Interest Phase – in which prospects demonstrate interest in a product by conducting product research.
  • Evaluation Phase – in which prospects or prospect companies examine competitors’ solutions as they inch toward a final buying decision.
  • Decision Phase – In which a final decision is reached and negotiation begins.
  • Purchase Phase – in which goods or services are purchased.
  • Reevaluation Phase – in B2B sales it’s common for offerings to involve contracts that need to be renewed. As a customer becomes familiar with an offering, and especially as a contract draws to a close, a customer will enter a reevaluation phase during which they’ll decide whether or not to renew their contract.
  • Repurchase Phase – in which a customer repurchases a product or service.

Inside sales managers commonly adopt strategies, tools and tactics aimed at optimizing each stage of their sales process.”

This is a good and very thorough definition, but I am going to generalize and simplify it a bit further into its more common language among marketers. The funnel stages are: ToFu (Top of Funnel), MoFu (Middle of Funnel), and BoFu (Bottom of Funnel).

ToFu content consists of things like blog posts, email blasts, social media, etc.

MoFu content consists of things like lead nurturing emails, webinars, whitepapers, and other educational materials.

BoFu content consists of things like sales emails/letters and direct purchase offers on your website.

A proper sales funnel will use demographic data, psychographic data, and (usually) marketing automation processes to help efficiently convert leads into prospects and prospects into paying customers.

Can This Really Help My Business?


Now–I know what you’re thinking!

“But Steve, this sounds extremely complicated. I just want to sell my products and services online. Can’t I do this without a sales funnel?”

Well, not really.

The reason is because this idea is SO ingrained into the digital marketing landscape that there is really no escaping it. The reality is you will use it, knowingly or not–you might as well know how to use it right.

And yes–knowing how to use it right WILL benefit your business! Not only will you gain more insight into your customers and their buying habits, but you will finally have a clear, repeatable process that can be refined to produce better results over time.

Here are three steps you can use to guide you as you dive into the world of digital marketing and using a sales funnel.

Step 1. Understand the Process


To this point, we have seen that the funnel itself is made up of different elements. Practically speaking, your potentials customers are going to be “inside” of the funnel at any given point, and when they get there, you need to be able to greet them with the type of content most appropriate.

This has a couple of implications when it comes to sales:

  1. The earlier, the better. The earlier your customers enter the funnel, the more likely they are to convert in the long run. For a buyer to enter “top of funnel” would essentially mean that they found YOU to be a helpful resource while they were doing their research–not looking to purchase. This breeds loyalty and trust with the prospect.
  2. Your content must have a purpose. There is no room in digital marketing for “fluffy” content. Every piece of content should always be pointing the next step down in the funnel. This is because it follows the natural and logical path that your prospect takes in the purchasing of a product or service. You want to meet them where they are. This process accomplishes that.

Very simply, you need to get a good handle on how to create this type of content and keep it coming. And, you need to make sure you have the proper content in the proper places.

Let me give you an example of how my funnel works using my website.

First, customers happen upon my blog posts. I have many commitments right now, and therefore, don’t have as much time to spend creating ToFu content as I would like. That said, I have a weekly blog post that comes out at 7:30 on the dot every Monday morning.

When customers reach my blog post (either via Google, Social Media, or the expectation of my posting it), they will immediately see an offer on the top right of the screen. In exchange for their email address, I will give them a 10-step checklist on how to build a dynamite small business blog.

Well, it is likely that the piece of content they are starting to read (the blog post) has something to do with marketing, blogging, etc. already, so I already know based on the ToFu content I am producing (the blog posts) they will be interested in my MoFu content as well–the checklist.

Second, customers join my email list. So once they have signed up, they will get a welcome email from me with their checklist attached. From there, I can nurture them and keep in constant communication with them–sending them articles, tips, and other pieces of content that familiarizes them with me and my work.

Lastly, I can ask for the sale. As part of my email marketing system, I can begin to sell them on the products and services they have expressed interest in. Keep in mind that this should be done sparingly–you want to preserve as much genuine trust and respect with your list as possible.

Also, the sales pages on your website (like this one) will act as BoFu content for prospects entering in at that stage.

Having a thorough understanding of the process will help you gain confidence in your ability to capture and retain customers. And, this is essential to digital marketing. Trust is everything.

Step 2. Respect the Process


While digital marketing will look much different for you than it does for others, you must not ignore what the industry has to say about it.

I have talked to many small business owners who kind of want to skirt around this process either because (1) they don’t have time or (2) they don’t understand.

Thing’s can be done to make more time, and this is certainly accessible information.

Digital marketing definitely has psychographic elements to it–to say it doesn’t betrays a fundamental understanding of the process. HOWEVER, for the most part, this is a simple formula. Once you learn what works, rinse, lather, repeat!

Things will certainly change over time (as all trends do), and the big search players like Google are constantly updating their algorithms. Many times this has no effect, but sometimes, it causes a fundamental change to the funnel process!

This will take some work, but it will be worth it. When we build a website for a customer, this marketing funnel is in view. We want to help you get this rolling!

Step 3. Fuel the Process


I included this final step for a specific reason, though it has multiple applications. In the world of digital marketing and sales funnels, etc., there is a plethora of information, and much of it is in conflict with one another!

This means you could spend weeks and weeks doing nothing but research and never even scratch the surface. I don’t say this to intimidate you, rather, to encourage you!

Just get started!

Dive in with the best knowledge you have, get a minimum viable product (MVP) out there, and get in front of your prospects. Your methods and tools will DEFINITELY change over time, but if you don’t go ahead and get yourself out there, you’ll never make enough money to explore further options, because your business will be dead!

This is obviously a bit less of a threat if your business has been established for awhile, but it’s a fact–businesses that do not make it online eventually will be forgotten about and left behind.

Now is a good time to hang your digital shingle. There is too much information available to make this an easy process not to just do it and dive on in.

[bctt tweet=”Now is a good time to hang your digital shingle. Dive in with the best knowledge you have.” username=”northmacsvc”]

I hope this has encouraged you to take a close look at your sales process and dive into the digital world. If you need help, you’re not alone! Sign up for our email list to get updates, and visit this blog regularly.

We talk often about just the kind of information you need. If you need help at a deeper, more personal level, consider starting a project with us. We’ll make you feel right at home.

*Question: Have you tried to implement a sales funnel in your business? What advice could you give someone brand new to digital marketing? Let us know in the comments below!



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