A sales funnel is a method of tracking potential customers from initial contact to purchase. Anyone using the channel should be able to see the status of the account and know exactly what to do with it.
Simplicity is good for sales funnels. It requires distilling the messy process by which people actually become customers into clear stages.
If you are designing your first sales funnel for your organization, there are really only a few things you need to determine. I’ll show you how to do this in three steps that should take less than an hour.
What you need before building a sales funnel
Not much, but you need to set something up in advance.
Know your target market and ideal customers well. It’s up to you to judge the level market survey Necessary, but you should have a high degree of confidence that your product or service is targeting the right people.
clue. You need clues. There is no point in trying to build or optimize an empty funnel. I assume you have leads you want to track in your sales funnel. But if not, I’ve covered some strategies later in this post One generation ahead Fill the top of your sales funnel.
Tracking system. Use whatever you feel comfortable with or already set. A customer relationship managementa sales engagement platform, a low-code app, or a spreadsheet will all work.
A definition of the term that everyone agrees on. This sounds cliché, but it is very important. What is a clue? What is an opportunity? Everyone needs to have exactly the same understanding of what each state means. This includes sales representatives, but also the marketing team. If they think a lead is one thing, but salespeople expect another, the funnel won’t work effectively (if at all).
sales funnel definition
Here are the definitions I’ll be using:
- lead: Potential customers who have not yet purchased.
- prospect: This is a viable prospect who has shown interest in your business and “warmed up” through marketing or sales promotion.
- Chance: This is a prospect that salespeople are actively trying to address.
- closure: The salesperson is no longer actively taking advantage of the opportunity.
You should have every right to use whatever terms make the most sense for your business. For example, a team running an account-based marketing program may want to differentiate between Marketing Qualified Leads (MQL) and Sales Qualified Leads (SQL).
As long as everyone agrees on what these terms mean and they align with your actual sales pipeline, you’ll be successful.
Where does this sales funnel come from?
My view of the sales funnel draws heavily on the work of Aaron Ross, especially in his book Predictable income. I’m not alone.
Many people use simple “assembly line” sales pipelines and cold calling sales funnels directly from this book.
Ross is still working on it, you can Check out his websitewhich has tons of free sales resources to help you grow your organization.
3 steps to build a useful sales funnel
For the purposes of this article, I’ve simplified a lot of things from the way Ross drew the funnel. He writes specifically about enterprise sales and assumes you have a full team of business development reps, sales reps, account managers, etc.
My Funnel assumes you have a business and some knowledge of the customers you want to sell to.
There are four stages in the sales funnel that represent the status of a customer: Lead → Prospect → Opportunity → Completed Won or Lost Deal.
Here it is visualized as a funnel:
As the person building the sales funnel, your most important responsibility is to identify the milestone events that separate one stage from the next.
Once you do that, building the rest of the funnel is just about filling in the gaps there.
Step 1: Decide when a prospect becomes a prospect
Salespeople have a limited amount of time to convert prospects into paying customers.
If they waste too much time on the wrong prospects, the company will die.
So it is very important for sales people no Take the time to find prospects with lower chances of success, smaller deal sizes, etc.
What you need to define are the rules by which prospects move from the fuzzy marketing funnel to the sales funnel, where they will receive attention.
Typically, a lead becomes a lead if they meet two criteria:
- They have expressed a certain level of interest in your product
- They or their company are viable customers
Typical triggers for expressing interest in a product include:
- Contact your company
- Follow your brand on social media
- Subscribe to newsletter
- Download a white paper or case study
- Attend the webinar
- Sign up for a demo
- Visit a trade show booth
Some of these will be more powerful triggers than others. In-person meetings at trade shows reflect greater interest than a following on LinkedIn.
But even having huge interest doesn’t necessarily make the lead a good prospect. They have to be people who can actually buy your product and have a reason to do so.
When considering a potential customer’s viability, some normal qualifications include:
- Budget: The company has funds to purchase and is willing to purchase
- authority: The person has the authority to make spending decisions
- need: The company really needs your product or service
- timing: Urgent purchase
this Bant Frames are common in B2B. It will help you ensure that your sales reps are only qualified leads with a high probability of ultimately making a purchase.
For some companies, prospects that meet the BANT criteria are worth pursuing regardless of whether they have shown some active interest in your company. Perhaps the potential trade size is so lucrative that it’s worth the downside risk to pursue this “cold” account.
If you don’t have leads in your channel, you’re going to have to start sending emails and calling cold accounts if you want to get results quickly.
Review this step:
- Leads are pure potential in your marketing funnel. There may be some interest and they may be viable as customers.
- You need to determine which buyer characteristics and interest levels will convert a lead into a lead worth spending your sales resources on.
Step 2: Determine when a prospect becomes an opportunity
The next big event to define in your sales funnel is when a lead becomes an opportunity worth trying to close.
During this stage, you will make recommendations, spend time negotiating, and actively promote purchase opportunities.
This is a huge step up in terms of the resources you have to spend, so you need to be really sure that the prospect is worth getting to this stage.
Typically, leads move down the funnel to opportunities when:
- Salesperson is developing a proposal and negotiating deal terms
- They speak directly to the final decision-maker
You have to be very ruthless about qualifications here. Salespeople are actually wasting a lot of valuable time by spending time on proposals they can’t complete.
At this point, all BANT frame elements need to be absolutely rock solid. Your team has done enough research to ensure the company has the budget and willing to spend. Now is the right time for the company to make this acquisition. There is an urgency to the ongoing conversation.
Best of all, your team is pretty sure the person they’re talking to actually has the authority to put their stamp on the final payment. There’s no point in making a proposal for people who are genuinely interested but don’t have the purchasing power.
Step 3: Add a new standard pipeline stage
At the top of the funnel you can add all your lead sources: these are contacts from inbound marketing, PPC, organic search, business development or buying lists.
In the first two steps, you set up the rules for Lead → Lead and Lead → Opportunity, so the hard part is already done.
The middle of your funnel is ready to rock.
Now just add the close at the bottom of the funnel and you’ll capture the complete process:
The transition from opportunity to closure is simple. Did you close the deal?
You really only need to track three results:
- Ended – Won: You successfully closed the opportunity and they made a purchase.
- Closed – Lost: You don’t close the opportunity, and there’s no point in pursuing it.
- Closed – Lost CBQ: You haven’t closed this opportunity, but it’s worth checking quarterly.
I’m not going to elaborate on this here. Either you win or you lose. And if you lose the deal, make note of whether it’s worth reaching out later. Sometimes it’s really a matter of timing. Trading is likely to be brighter next quarter.
But many times, the final answer is “no.” And you want to make sure that future sales reps don’t go down the same path because of this seemingly promising account.
Congratulations. You’re done, probably in less than an hour.
Get leads for your sales funnel
If you don’t have any clues, you have many options to get them. The best approach depends on your budget and the skills of your team.
For the fastest results, start cold calling. I know it’s brutal, but it works, and you’ll learn a ton of great information about what your target audience really cares about.
You can purchase a contact list to start calls, or you can create your own.
In my experience, purchased lists are never that good, so I recommend building your own.
It’s hard, hard work, but you can use the Internet and common sense to find contact information for businesses that might need your product. Using services like SignalHire and Hunter.io can help you find effective contact information for the right people in your organization.
In addition to cold calling, there are email marketing, the expansion cost is much lower. These campaigns are also easier to run and track, so if you have trouble building your list, you should definitely consider this option.
Using paid advertising is another method with a short turnaround time. In this case, you’ll want to target your ads to login page You can capture clues there.
Sure, paid search can get pretty expensive, but if you’re starting from scratch and don’t have inbound traffic yet, generating leads through organic search will take months (at best).
Social media marketing can be valuable if you already have a strong presence, but the quality of leads generated through this channel varies widely. Yes, it’s becoming increasingly important for B2B brands, but it doesn’t always drive the highest-intent traffic.
digital marketing strategy Work. Keep trying. You’ll find the right pipeline and get the leads you need to sell your pipeline.
