What Is A Sales Funnel: A Simple Analogy

The thing with the terms in use in the digital marketing world is that they often do not portray the picture you want to see. A Sales Funnel is one such term that a lot of people use voraciously but do not understand properly. Well, this very short post will now attempt to clarify to a layman what indeed is a sales funnel.

Not Understanding the Sales Funnel Can Cost You

Let me begin by telling you a personal story. Years ago I used to work as an independent business owner for a huge direct selling company. ( Yes, I have all sorts of experiences indeed!) One day, I met with a prospective customer with the goal of selling him a thing or two. The prospect showed tremendous interest and promised to buy three of the big-ticket items that I was pitching, nearly close to $300 over the next three months.

At that time, I was more comfortable dealing with orders in the range of say, $50-$70 and for me this was a huge huge thing! So I got overly excited. I began to bore him to death by telling him (unnecessarily) about all the features and benefits those products and a few others can offer and what not. I remember going home that day with me floating on cloud nine, simply too elated to sleep that night.

I called him the next day and he told me that he would think about buying the products in a few weeks time and also added that he would contact me when he was ready to buy. I was in the field long enough to know something for certain then. That he wouldn’t buy a single thing. And he didn’t. But where did the happy deal go wrong? The answer lies in understanding how the Sales Funnel works.

A visual representation of the Sales Funnel
A visual representation of the Sales Funnel

Structure & Stages of a Sales Funnel

A sales funnel is basically a happy little marketing term that describes the journey a customer takes with the final destination as purchasing. For this reason, it is also called the Purchasing Funnel. You can think of this as an upside-down right circular cone, with a large flat top, narrower but chunky middle portion and a shallow bottom.

The top of the funnel represents all the prospects who are made aware of your brand’s existence. Think of a donut shop you have opened just now but people still need to hear about your superior donuts that can change the world. You have to invest in advertising, social media or word-of-mouth. You need to make them aware, right? This is why the top of the funnel can also be termed as “AWARENESS” for your prospective customer.

The middle of the funnel is the biggest part of the funnel. Here you can pursue the people that have already heard about your superior donuts that can change the world to actually making a decision to buy a physical donut from you. Now that purchasing decision may come instantly, like with the prospect I had those many years ago. In that case they will move straight to the counter and order the Captain America-flavored donut along with a cup of Black Widow coffee maybe. That means they are going straight to the end or the bottom of the funnel themselves, mentally all geared up to take the final “ACTION”. This is why the bottom of the funnel is known as the “ACTION” stage for your customer.

Now let’s go back to the middle portion again. What happens when the people that are entering your donut shop are not yet prepared to take that action? That’s right! You have to gently nudge them along, show all the different kinds of donuts that can change the world in their own unique ways. You need to make sure that the people inside your shop now takes “INTEREST” in what you have to offer.

Moreover you need to offer them to try a bite or two from your latest signature donuts, tell them about the features and benefits of dunking them in your specially brewed coffee and / or show them the price list with all the offers and discounts currently in use. Basically you are now trying to move him from “INTEREST”-stage to the “DECISION”-making stage ( some may call it as creating a “DESIRE” for the goods/services). These are the two things that happens in the middle of the sales funnel.

Different stages of the Sales Funnel
Different stages of the Sales Funnel

Know the Importance of the Sales Funnel

So, now you guys get what was wrong in that deal gone wrong all those years ago? Yes, I made the terrible mistake of confusing the buyer because I didn’t realize the importance of the sales funnel. He was already at the bottom of the funnel but I treated him as I would anyone from the top or middle parts. No wonder he didn’t buy from me. Would you?

Do you have any experiences similar to my own? Let me know in the comments section below. Thanks in advance. Happy Blogging!

* This post is very brief and meant to outline only the basics of a sales funnel concept. There is a lot to learn about the sales funnel, its importance and how to create a perfect funnel for your business. You can read my other article here to learn about all these things.*

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