What is the sales funnel?
The definition of the sales funnel (also known as a revenue funnel or sales process) refers to the buying process that companies lead customers through when purchasing products. A sales funnel is divided into several steps, which differ depending on the particular sales model.
One common sales process is divided into seven phases including:
Awareness – in which prospects become aware of the existence of a solution.
Interest – in which prospects demonstrate interest in a product by conducting product research.
Evaluation – in which prospects or prospect companies examine competitors’ solutions as they inch toward a final buying decision.
Decision – In which a final decision is reached and negotiation begins.
Purchase – in which goods or services are purchased.
Reevaluation – in B2B sales it’s common for offerings to involve contracts that need to be renewed. As a customer becomes familiar with an offering, and especially as a contract draws to a close, a customer will enter a reevaluation phase during which they’ll decide whether or not to renew their contract.
Repurchase – in which a customer repurchases a product or service.
Let’s dive deeper, you may have all heard the terminology:
A lead is someone who becomes aware of your company or someone who you decide to pursue for a sale, even if they don’t know about your company yet..
Typically, this includes everyone in one big group, but you could also break this down further to only look at qualified leads, which are leads that meet certain qualifications to becoming customers.
For example, if you’re selling pet products, a qualified lead is someone who has a pet, versus someone who simply likes the cute animal pictures on your blog, but will never buy anything from you.
Prospect is a term that’s used differently based on the company. In many cases, it is used interchangeably with qualified lead, but usually, a prospect is someone who has had some kind of contact with your company and they are still interested.
All prospects are leads, but not all leads are prospects.
We all know what customers are! These are people who have made a purchase.
You can further separate out people who have made just one purchase and people who have made several purchases, or repeat customers.
All of these people fit into your sales funnel!
More to come…