Sales Funnel

The term Sales Funnel describes the path a potential customer takes from initial contact to purchase. The number of prospects decreases from stage to stage – hence the comparison to a funnel.

At the top of the “sales funnel” are many potential customers who only superficially know a company or product. At the bottom are the few who actually buy. The goal of a good Sales Funnel is to successfully guide as many prospects as possible through the individual stages up to acquisition.

A Sales Funnel should help to make sales processes more efficient – and thus improve the effectiveness of sales. For this purpose, the conversion rate for each phase is calculated. If it is conspicuously low, this is an indicator of a possible  weakness.

What phases does a Sales Funnel comprise?

The phases of the Sales Funnel are not set in stone. They can differ from case to case. It is your task to develop a funnel individually for your business.

The funnel is often divided into four phases, which resemble those of the AIDA model:

1. Awareness
   Here, potential customers first learn about your company. This can happen through advertising, social media, blog articles, or recommendations. Goal: Arouse attention.
2. Interest
   In this phase, prospects gather more detailed information. They might read your website, subscribe to the newsletter, or follow you on social media. Goal: Deepen interest.
3. Decision
   Now it's about building trust and giving the final push. This can include product demos, customer reviews, case studies, or special offers. Goal: Convince the customer of your product.
4. Action
   At the bottom of the funnel is the desired action – usually a purchase, sometimes a registration or inquiry. Goal: Achieve closure.

Sometimes phases after the purchase are also added, such as Retention and Advocacy.