What Is A Sales Funnel?

Ok now in this article I’m going to address a question that I get asked so many times….What on earth is a sales funnel?  

So in order to answer this question, I’m going to cover the basics of what a sales funnel is and why it’s so critical to the long term success of your business. So let’s jump right into this.

A Simple Definition of A Sales Funnel

A sales funnel is a strategic relationship-building process where you take a complete stranger and turn them into a subscriber or follower and then turn them into a customer and then turn them into a lifetime customer.

Now, this can be done on multiple levels of your business. Your business will have an overarching sales funnel or value ladder like the one below.

Now the reason, why it looks like a funnel is because not all the people that have an interest at the beginning through your marketing efforts are going to become paying customers.

You can also see each stage of the funnel as people move from being just strangers and prospects into customers, this leads to second-time customers, third type customers and ultimately lifetime customers.

So this leads to you offering different products and services to your prospects based upon how much of a relationship you’ve built with them.

Challenges In Getting It Right

The reality is, at every single stage you’re going to lose some of the people. Some of you might think you generate interest in a hundred people and those a hundred people are going to buy but unfortunately, it just doesn’t work that way.

So you what to optimize the sales funnels. The conversion from the people that showed interest are the ones that buy is the highest possible. Subsequently, that’s an entire science that businesses are continuously trying to optimize by testing, by analyzing, by tracking, absolutely everything through that sales funnel.

This is a fundamental thing to understand for your business. How would you generate the leads? and what are the processes that you’re using to convert prospects into paying customers

Solutions To Gain Customers

The whole purpose of a funnel is to build a relationship. You’re strategically building a relationship with a customer.

Let’s look at it another way, if you are in a person to person sales environment, you wouldn’t just go up to someone at a meetup and say, hey, buy my product. Instead, you’d have a conversation with them, you’d learn about their needs, you’d learn about their problems. You’d have a dialogue back and forth and you would exchange business cards. A week or two later, or a couple of days later, you’d meet them for coffee, so you’re building a relationship  and then towards the end of that meeting or relationship you say, hey by the way I think it would be great if we work together on this because I really think I can solve your problem and they’re going to believe you because you met at a meetup or you met at a networking event.

Now Let’s look at the example of using emails and videos leading up to a webinar in order to build relationships.

It’s building trust and you build trust by providing value, which is what all those emails and videos are for leading up to the Webinar. Now on the Webinar the prospect has two choices. They can say, you know what I trust you you’ve delivered that value I think we have a good enough relationship let’s work together.  So they purchase your product or service or they don’t. and then at that point, you don’t give up. You follow up again, you continue to build that relationship and as you can see in the diagram, you actually wind up going down the funnel.

In Closing

As I have shown a sales funnel is really just a simple concept, on one end you have a person with some interest in what your selling and at the other end you have a loyal paying customer. The key to success is building relationships and focusing on what you can offer your prospects to get them one step further in your funnel and not a shortcut to them straight to the bottom of the funnel.