A sales funnel is a series of actions or events that a potential customer (called “lead” or “prospect”) goes through before completing a product or service purchase.
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Why Does a Company Need a Sales Funnel?
Customers today are increasingly digital, and consume online content, shop online and watch movies online, basically do the maximum they can, online. Therefore, it is crucial for most companies to build a website that matches the actions taken by a prospect before they become a customer.
The process followed by the prospect towards a purchase decision is represented by the acronym AIDA – Awareness, Interest, Decision, Action. In image form, the process looks like this:
This process allows the lead to gain awareness of their problem, search for and find available solutions and evaluate the options before deciding to buy.
Sales Funnel Structure
A typical sales funnel has a broad top and narrows down as it goes downwards – reflecting the decreasing number of prospects who eventually become customers. We can present a sales funnel with the following segments (or stages):
Top Of The Funnel (or TOFU)
Middle Of The Funnel (or MOFU)
Bottom Of The Funnel (or BOFU)
This can be represented graphically as follows:
The Sales Funnel and the Sales Pipeline – How To Manage A Sales Funnel
For any sales funnel to be relevant and successful, the sales pipeline should match the prospect’s journey from Awareness to Action and should provide insights into the ideal customer persona.
The relation between a typical sales process and customer journey is as below:
Create awareness of the brand
Develop prospect’s interest in the brand
Make an offer to sell
The decision by the customer
This relation can be illustrated graphically as follows:
Types of Sales Funnels
Before we explore case studies of companies using sales funnels successfully, let us examine the major sales funnel templates.
A sales funnel is not a static shape – every company should make its own customized sales funnel to engage and convert its specific customer base. However, certain industries use sales funnels more than other industries, and this has given rise to templates that can be adapted for use by companies in those industries.
E-commerce Sales Funnel
An E-commerce company needs a fully-functional sales funnel to ensure it attracts the right customers for its products.
This funnel is relatively simpler as the customer makes their purchase decisions on their own and does not need a sales representative to help them move along the funnel.
Visually, this is represented as:
2. SaaS Sales Funnel
The Software As A Solution (SaaS) industry is an extremely cluttered and competitive segment.
The SaaS Sales Funnel presented here helps the brand stand out from the competition.
Visually, the funnel looks like this:
3. Real Estate Sales Funnel
The real estate industry places great importance on personal contacts and relationship building.
Lead qualification is an important part of the sales funnel.
The funnel can be visualized as under:
4. Business Consulting Sales Funnel
A business consultant provides advisory and management guidance to companies and is primarily a B2B segment.
This business requires a high level of awareness and education to convert a lead.
The funnel looks like this:
5. Product Funnel template
A Product Funnel is designed to help increase revenue.
The key function of this funnel is the ability to upsell to a customer once they are inside the funnel.
Visually, the funnel looks like this:
6. The 5-Step Email Funnel
Email marketing is becoming increasingly important for companies to increase sales and optimize the leads-to-customers journey at a faster rate.
The 5-Step Email funnel allows companies to match the customer journey from Awareness all the way to Conversion and post-purchase engagement for Loyalty and Advocacy.
Visually, this funnel looks like this:
7. The HubSpot Sales Funnel Template
HubSpot is a very popular CRM and pipeline management tool with several unique features that make it easier for users to build an effective sales funnel.
A typical HubSpot sales funnel template will have the following stages: Lead generation – Lead nurturing – Lead qualification (marketing) – Sales accepted lead – Lead qualification (Sales) – Deal closure or sale completion – Post-sale engagement.
A simple graphic visualization of the HubSpot sales funnel looks like this:
Sales Funnel Case Studies
Sales funnels are important for both B2B and B2C companies, whether global multinationals or small and medium enterprises. The following companies, leaders in their respective industries and with a global footprint, can be considered the best case studies for understanding how companies can use a sales funnel to gain maximum Conversion of leads or prospects to confirmed customers.
VMWare
VMware is a cloud computing and virtualization company.
It designs and puts out content on its website home page that enriches the sales funnel structure and provides a user experience to visitors.
An outline of its funnel:
TOFU (Awareness): glossary of technical terms, videos, and guides
MOFU (Consideration): Solutions for all products and services
BOFU (Decision): Case studies, videos, and long-form articles
SAP
It is the unchallenged leader in business management and technology integration.
It uses blogs and knowledge centers for key industry verticals.
An outline of its funnel is as follows:
TOFU (Awareness): Descriptions of solutions for various industries; Insights Blog
MOFU (Consideration): Videos, infographics, and case studies
BOFU (Decision): Detailed solutions, case studies, and customer stories (“social proof”)
CISCO
It is a global leader in network hardware, software, and telecom equipment
Its funnel provides a deep dive for its customers, who are usually specialists in various fields.
The outline of CISCO’s funnel is like this:
TOFU (Awareness): Multiple home pages entry points such as Product Guides, videos, and product demos
MOFU (Consideration): Free trials, descriptions of top products, and most popular solutions
BOFU (Decision): Webinars, product and system demos, analyst research reports
Red Hat
It is a leading open-source software provider.
Its funnel focuses on its brand values and detailed content assets.
The funnel outline is as follows.
TOFU (Awareness): Pillar pages to explain its key topics, Brand Values page
MOFU (Consideration): Case studies of solutions, videos, e-books
BOFU (Decision): Case studies, resource libraries, e-books
Oracle
The second-largest software company in the world
It has a robust funnel structure, as seen below:
TOFU (Awareness): “Learn” section, Pillar pages to explain its key topics, blogs
MOFU (Consideration): Industry pages with solutions, videos, and curated blogs
BOFU (Decision): Case studies, Featured Products page, Analyst reports, Virtual events
Microsoft 365 For Business
This is the most popular Office suite available today and is used by over a billion customers globally.
It uses a simple interface to help customers navigate the various plans depending on their business.
The funnel structure is in keeping with the simplicity of the customer journey:
TOFU (Awareness): “Help Me Choose” call-to-action area, videos, blogs
MOFU (Consideration): Business plans comparison chart, white papers, forms for users to fill in (lead generation)
BOFU (Decision): Case studies, live demos, online workshop space, product certifications
Samsung
The Korean hardware and software conglomerate has a very active B2B division.
It targets the B2B audience with business solutions specific to various industries.
It has a very detailed sales funnel:
TOFU (Awareness): Industry-wise product solutions section, case studies and technology insights
MOFU (Consideration): Videos, product ratings, case studies and white papers
BOFU (Decision): Offers, call-to-action section, business account creation
Telestream
This US company is a leader in the video content software industry.
It offers digital video tools and workflow solutions.
The sales funnel structure is as follows:
TOFU (Awareness): Paid media, company website
MOFU (Consideration): Product pages, forms for users to fill in (lead generation)
BOFU (Decision): Case studies, call-for-action space
Conclusion
Sales funnels are extremely important tools for a company to optimize its customer journey at scale and with minimum wastage.
The objective of a robust sales funnel is to yield maximum conversions of leads to customers by improving the prospect’s engagement with the brand at each stage of the funnel, reducing friction during the process and offering content that is relevant and helps make the purchase decision.
There are various types of sales funnels, as we have seen above. A properly designed sales funnel improves conversions and boosts revenue. It also reduces the risk of losing potential customers.
The most important goals of a properly designed Sales Funnel are:
Provide great value to potential customers
Reduce customer acquisition cost (CAC)
Decrease churn and expand the customer lifetime value (CLV)
There are different styles of sales funnels based on industry requirements. The case studies given here illustrate that companies can, and should, customize a template sales funnel to their specific customer journey requirements.