A sales funnel is a marketing concept that maps out the journey a customer goes through when making any kind of purchase. The model uses a funnel as an analogy because a large number of potential customers may start at the top-end of the sales process, but only a fraction of these people actually end up making a purchase. As a prospective customer passes through each stage of the funnel, it signifies a deeper commitment to the purchase goal. This journey can be divided into several steps, which can vary according to the sales model.
Typically, these stages include awareness, where potential customers are made aware of the existence of a product or service; interest, where they express interest in a product by conducting product research; decision, where they decide whether or not to purchase the product; and action, which refers to taking the step of purchasing the product. After the action stage, there can also be a retention phase where the focus is on turning customers into repeat buyers.
The sales funnel provides a useful framework for analyzing your business and identifying areas for improvement. By understanding each stage of the funnel, businesses can tailor their strategies to improve customer engagement, enhance their selling techniques, reduce the number of drop-offs at each stage, and ultimately increase conversion rates and sales. Effective marketing strategies and campaigns are often developed with the sales funnel in mind, ensuring that they target the right audience with the right message at the right time.