The model was developed by American advertising strategist Elias St. Elmo Lewis in 1989. Since then, it has gone through several revisions, but has not lost its relevance.
The sales funnel allows you to:
identify the main stages of sales and form the most effective lebanon phone number library relationships with clients at each of them;
identify factors that motivate customers to make a purchase;
find the “bottlenecks” where the company most often loses customers;
increase sales and attract more leads.
Experience shows that many entrepreneurs perceive the sales funnel as just a reporting element. This is a wrong approach: working with it, as well as its competent implementation in the CRM system, contributes to business growth.
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How does a sales funnel work?
The sales funnel is most often depicted as an upside-down cone. Its upper and widest part reflects the conventional number of people who have only heard about the product/service, for example, from advertising. The tip of the cone shows the number of people who actually bought the product/service after hearing about it.
The number of stages a person goes through from the moment of first becoming familiar with a product to its purchase varies. Much depends on the business sector and the specifics of the products being sold.
The most popular sales funnel scheme includes four stages: attention, interest, desire, action. This is the so-called AIDA formula (Attention, Interest, Desire, Action).
Attention
At this stage, it is important to introduce the buyer to the product (for example, through advertising) and encourage him to learn more about it (google it on the Internet, go to the seller's website, order a consultation).
Interest
The goal is to increase attention to the product with the right presentation. To do this, the seller first finds out the client's problems and offers a solution with the help of his product/service.
Desire
At this stage, the client already wants to buy the product, but is still tormented by doubts ("expensive", "maybe it's better to buy in another store", "not sure if I'll use it"). The seller's goal is to remove these doubts by promising the buyer an additional benefit from the purchase. Free delivery, for example, or a discount on a new product.
Action
This is the actual purchase. The seller and the buyer shake hands, each got what they wanted, curtain. It would seem that's all, but in fact it isn't. The work with the client continues. The goal is to encourage him to come again and buy again.
In real life, buyers do not always "fall" to the bottom of the cone linearly. "On the way" they may lose desire and repeatedly return to previous stages. The final result may be influenced by various factors, from product segmentation to the promotion methods used and pricing policy.
This is where a sales funnel comes in handy, which can and should be used as an analytical tool to find and eliminate problematic stages.
How to Analyze Sales Using a Funnel
Sales funnel analysis allows you to achieve several goals:
increase in profits;
control and effective management;
planning the work of managers;
evaluation of the effectiveness of employees, various promotion channels and the company as a whole.
Conclusions and decisions should be made based on the conversion dynamics indicators at all stages of communication with consumers. Let us recall that conversion is the percentage expression of possible actions (purchases) to real ones (in other words, positively closed transactions). This parameter allows you to evaluate the effectiveness of the marketing strategy.
For clarity, let's look at a simple example of calculating conversion. Let's assume that the sales funnel looks like this:
Sales Funnel Example
Now, based on the data provided, we will calculate the conversion at each stage:
The employees called 100 people, 20 of whom were interested in the offer. The conversion rate at the first stage was 20%:
Of the 20 people who received the commercial proposal, 15 agreed to a meeting/presentation. Thus, at this stage, the conversion was 75%:
Of the 15 interested parties who viewed the presentation, 7 clients signed the agreement. Conversion rate: 47%:
Of the 100 people who were called, 6 made a purchase.
Conversion analysis in general and at each specific stage is carried out individually, taking into account the features of products and the field of activity. Integration with CRM systems allows you to study in detail and evaluate all stages of sales in terms of efficien
