What is a sales funnel?

As a big fan of the film/play Glengarry Glen Ross, an unforgettable scene for me is when Alec Baldwin is standing at a blackboard lambasting a team of desperate salesmen at risk of losing their jobs as he explains buying signals in terms of AIDA:

• Attention
• Interest
• Decision
• Action

In its most basic form, AIDA is a great example of a sales funnel, whether that is within the marketing industry or any other.

In a slightly advanced form, a sales funnel still follows the same principles but there may be a few interchangeable key words in the acronym and a few extra steps in the process.

Stages of the sales funnel

This is a slightly more detailed analysis of a typical sales funnel.

Stage 1 – Awareness

At this stage, potential customers become aware of your brand, product, or service. This is driven through advertising, content marketing, social media, public relations, word of mouth, etc.

Stage 2 – Interest

Following the awareness stage, a proportion of individuals will (hopefully) show an interest by seeking more information. This may be by visiting your website, signing up for a newsletter, or – if you’re old school like me – you might even phone a company or visit a shop/showroom to find out more.

Stage 3 – Consideration

At this point, a prospect will be evaluating your offer and comparing it with alternatives. They may engage with your brand to gain extra detail – for example, requesting a demo or reading customer reviews.

Stage 4 – Intent

This is the critical stage where potential customers show clear signs of wanting to make a purchase. That might be asking for a quote or (if it’s online) adding items to a shopping cart.

Stage 5 – Purchase

This is the final stage where the prospect becomes a customer and completes the purchase. Everything in your sales funnel has been leading to this point.

Now, the holy grail of this sales funnel could be the optional final stage…

Stage 6 – Post Purchase

To quote again from Glengarry Glen Ross “Don’t sell a guy one car. Sell him five cars over fifteen years.”
Your focus shifts to retaining the customer, encouraging repeat purchases, or turning them into brand advocates. This can have an exponential lifetime value as you have already done the hard work to win the customer in the first place.

To relate an example of this to what we do at Alchemis, consider the following scenario:

Your agency is a client of Alchemis. It’s a tough market out there, but Alchemis has arranged a meeting for you with the decision maker at a large company you’ve been keen to work with for ages and who holds the purse strings to buy the service you offer.

By this point you have already cleared the hurdles of at least stages one to three outlined above – and very likely stage four too, given that they have taken a fair amount of time out of their busy schedule to listen to your pitch of how you can help them.

If the decision maker decides to appoint your agency, you have cleared stage 5.

Following the initial work you do for them, the decision maker for this company is impressed, giving you additional projects or increasing the retainer for your scope of activity.

This is an ongoing return on investment for your agency without the need to go through the hoops of winning this business again from scratch.

Why is it a funnel?

The logic behind the sales funnel is that many people enter the process at the top (awareness) but only a smaller number make it through to the end (purchase). The goal is to optimise each stage to move customers further down the funnel, increasing your conversion rates and driving sales.

If you would like to find out more about how Alchemis can help your agency optimise your sales funnel to win new business, please get in touch.