The sales or conversion funnel is a metaphor used in marketing or business administration to refer to the phases of the sale. It is the process by which potential sales opportunities are qualified and selected to turn them into real opportunities that end up in real transactions. The concept is represented as a graphical tool that shows the business opportunities (and their amounts) at each step of your company’s sales process and is used especially by the sales teams of large companies.
The original approach has been modified by many authors, who have incorporated new links, such as product testing and loyalty. It has been applied in other disciplines, such as the provision of services and even, more recently, the analysis of social networks on the internet. It has also received criticism: there are those who consider it obsolete for the current times, especially because of the impact of digital media on the ways consumers access information and make purchasing decisions.
Phases of Sales Funnel
The funnel is nourished by marketing actions to generate demand and the sales force’s own prospecting actions on its client or prospect portfolio. These opportunities are qualified by investigating the real situation of the alleged client and their possibilities and intention to purchase and finally culminate in the sale phase with the construction and launch of the offer, negotiation, closing of the sale and delivery of the solution sold.
To maintain the process efficiently, each phase must be fed and managed with specific tools and the entire process with a global vision of sales funnel management. The phases in general terms would be:
Lead or Data stage
It is the first stage in contact with our clients and occurs when we learn that a potential client exists (natural or legal person). This information is called Lead or Data.
It is the stage that follows the LEAD and is qualified as such when, from the investigation, we obtain evidence that allows us to conclude that the potential customer could require our products or services.
It is the stage that follows the prospect and begins when our potential customer expresses his interest or need in our products.
Qualified opportunity stage
After detecting an opportunity, it is mandatory to qualify it. Every salesperson should have a list of smart questions, the answers to which allow him to take the potential customer through the stages. The qualified opportunity gives us arguments for the proposal and for closing, or for abandoning the opportunity.
Uses of Sales Funnel
Useful to control the workflow in each business taking it to the closing of sales, define priorities, allocation of resources and detect bottlenecks.
The sales professional must know his sales conversion rate by dividing the number of sales closings he achieves in a given period of time, by the number of prospects in that period.
Sales funnels are indispensable, since every company and/or independent professional needs to define it to have a flow through which it will take strangers and turn them into loyal customers to the brand.
There are several methods to execute a sales funnel, in traditional businesses it can be something as simple as the process of attention and / or purchase within a branch, however, in digital businesses there are various tools to execute sales funnels, the purpose of all of them is to be able to capture the process within a series of steps accessible to the end user.