In some businesses, marketing and sales are two separate departments, and in such companies the sales funnel is separate from the marketing funnel. For optimum sales, the two must work in harmony. In small online businesses, there is no distinction between the two but rather there is one longer funnel. There is no one answer as to what stages each funnel has, and even the terminology differs from writer to writer.
The Marketing Funnel
The role of marketing is to research their market, to know who their target market is and to bring as many people into the funnel as possible. They then use a marketing funnel which consists of the stages: awareness, consideration, preference, and action. The marketing funnel tracks the steps that prospective buyers move through before they make a buying decision (1). As prospects move through the marketing funnel, the marketing team captures certain statistics e.g. number of visitors, number of clicks, conversion rate, etc. which they use to take action and to refine their marketing strategies. From what the prospects do, the marketing team knows whether to send more information or to make a follow-up call (1). So here is how the marketing team uses the marketing funnel.
- Awareness – They create brand and product awareness to stimulate interest in the product, using various means, like paid advertising, blog posting, public relations, free seminars, free webinars and social media.
- Consideration – Interested people will click the given link to visit the website. They read the sales letter which provides intrigue (by sharing product benefits) and incentives (free downloads or free e-courses or free coaching session) and persuades them to take action.
- Preference – Some people will leave and move on but others will compare the product to similar products and they will show interest by staying longer on the website or by revisiting.
- Action – In the online world, the required action is to provide contact information in order to get the free gifts. Of those who opt-in, few will purchase right away. The rest will need further sales effort before they can buy.
As soon as the people share their contact information they leave the marketing funnel and enter the sales funnel and they become sales prospects (2). In a large organization they are literally handed over. So why is it called a funnel? Naturally, many targeted people will see the information or the ad, less will spend time on it to explore and consider the product, and even less will take action. The numbers narrow down like a funnel.
The Sales Funnel
The people who opt-in will not necessarily purchase straight away. Most will need more persuasion before they buy (3), which is why most online marketers use email newsletters through autoresponders.
- Value provision – The sales function of the business uses regular newsletters to provide valuable information that the prospect can use but not enough to do without the product. While sharing the valuable information, the sales team provides more information about the product, e.g. its benefits and how it beats the competitors.
- Decision phase – Those prospects who are interested in the product will evaluate the product more and compare it with similar products in order to make a decision. This action is captured by the system.
- Action – Eventually some of the prospects will buy. Of the total prospects captured at the end of the marketing funnel, a smaller number will eventually buy.
- Loyalty – The sales team can add a loyalty stage in order to get repeat business or to generate referrals.
- Repurchase or Upsell – The sales team can then upsell a more expensive product or manage to get the person to keep buying the old product.
The Sales and Marketing Funnel for Small Online Business
For the small online business, there is no separation between the sales funnel and the marketing funnel. The sales and marketing funnel can look like this:
- Awareness – in which the targeted person becomes aware of the product through an ad or blog etc.
- Consideration/preference – Some people take an interest, check out the product, research the product, etc.
- Action phase – They opt-in to download the free gift and to find out more about the product.
- Value provision stage – the business owner sends a series of email newsletters with valuable information or a free course.
- Decision phase– interested prospects keep evaluating the product through the email newsletters till they decide whether to buy or not to buy.
- Action phase – Some of the prospects buy the product.
- Loyalty phase – Loyalty of the buyers is maintained in various ways to keep the buyer interested so that they can buy again. Satisfied customers are the best advocates as they talk about the products on social media.
- Repurchase or Upsell – The business can upsell more expensive products, e.g. a premium product or an advanced course.
The marketing funnel and the sales funnel are different in a large organisation, but in a small business it is just one funnel, the sales and marketing funnel. In the sales and marketing funnel, it is common for a person to jump from stage 1 to stage 3 and stage 6 in one day if they have been looking for the product already. In fact this is what is taking place these days as people search the internet when they want certain products (1). But for those who only become aware of the product because of the awareness campaign, it takes longer to make the buying decision. That is why they need more persuasion while doing their research on the side or while getting ready to buy the product. All the same, from the beginning when many people see the information about a product to the time they buy, the numbers keep dwindling. It is common for the sales rate to be 1% of the original number who clicked on the ad.
Back to Digital Marketing Processes