What is Sales Funnel?
A sales funnel refers to a virtual funnel of an organization through which all the purchasing process of the company’s product or service occurs. Just like a real world funnel, a lot of visitors arrive at the top of the funnel and through the filtration process (lead qualification, objections and other processes of the sales cycle) some of them reach the bottom of the funnel to eventually become a customer.
A typical sales funnel is divided into different stages which differ depending on the particular sales model. Throughout a single sale cycle, sales reps move prospects to subsequent steps on the funnel and if everything goes well the prospect is converted to a customer. One of the most common ways of dividing a sales funnel into different stages are:
- Awareness Phase: This is the prospecting stage where prospects become aware of the existence of a solution.
- Discovery Phase: In this phase prospects demonstrate interest in a product and sales team initiates the initial engagement and qualification process of the prospect.
- Evaluation Phase: In which prospects or prospect companies examine competitors' solutions as they inch toward a final buying decision.
- Intent Phase: In which a final decision is reached and negotiation begins.
- Purchase Phase: In which goods or services are purchased and the deal is closed.
- Loyalty Phase: After the initial offering, the company needs to maintain a healthy relationship with all customers for upselling and renewing the contract.
Both marketing teams and inside sales managers commonly adopt strategies, tools, and tactics aimed at optimizing each stage of their sales process.