It’s the dreaded buzzword: sales funnel. I’ve talked a lot in the past about the importance of communicating with your audience depending on their level in the sales funnel. I’ve also talked about the importance of a closely aligned sales and marketing team. But what does this really mean?
The sales funnel, also commonly known as the purchase funnel or marketing funnel, is a customer’s journey from the moment a brand or product attracts his or her attention to the point of action or purchase. While the sales funnel has evolved and become more complex over time, the most basic journey is described as:
Every company has its own definition of its sales funnel and has identified different activities that work best for its objectives and audience behavior. Do you know what your sales funnel looks like? If not, ask yourself the following questions:
- What journey does our customer go through before purchasing our product?
- How do we attract leads to first become aware of our company?
- What activities do we do to move a customer through to make a purchase?
- How can we make this journey better for our customers?
A lack of understanding or agreement on an organization’s sales funnel is one of the biggest deterrents between the sales and marketing teams, and this deterrent can cost your startup valuable revenue. According to a study by the Aberdeen Group, organizations with good alignment between sales and marketing teams achieved 20% annual revenue growth in 2010; companies with poor alignment saw a 4% decline in revenues. These are astonishing stats, and ones that can make or break your startup.
Our sales and marketing team for our partner company, Foodsby, recently went through the activity of defining our own sales funnel, which is defined as:
Each step has their own set of marketing and sales activities to move our audience through their journey. Ever since we established our funnel and all got on the same page, we’ve been able to more closely analyze our sales and marketing process. We now know where our leads come from, the best type of leads to approach to make a successful sale, and what types of communication they need to move through to the next level.
The sales funnel is an excellent tool to better understand your company processes and your customers’ needs. Identify your own sales funnel and define the activities your team will do within each stage. Make sure you measure results along the way to best optimize your strategies to see continued growth.