A sales funnel, or purchasing funnel, is a marketing model that helps marketers and salespersons visualize the theoretic customer journey towards the purchase of a good or service.
A B2B sales funnel, determined by the buying behavior of the lead. It adopts the prospect’s perspective and shows at after each stage how many candidates out of the total were promoted to the next step (the conversion rate).
The sales funnel visualizes the lead qualification process. It pans out to acquire a large number of B2B sales leads that enter the broader part of the top of the funnel, and a small fraction trickle down as customers.
There were many models like the Buying Cycle model, the AIDA model, and the Hierarchy of Effects model previous to the one we see today that describe the above phenomenon.
The most famous model out of these is the AIDA model (Awareness, Interest, Desire, and Action), devised by E. St. Elmo Lewis (an American advertising advocate) in 1898. It is still used to explain the basics of today’s B2B sales funnel.
However, the association of the flow of human action or the AIDA model was associated with the sales and marketing activities and was designed as a funnel in Bond Salesmanship by William W. Townsend in 1924.
The salesman should visualize his whole problem of developing the sales steps as the forcing by compression of a broad and general concept of facts through a funnel which produces the specific and favorable consideration of one fact. The process is continually from the general to the specific, and the visualizing of the funnel has helped many salesmen to lead a customer from Attention to Interest, and beyond (p. 109, Bond Salesman, William W. Townsend,1924) – Hathi Trust
- Awareness– The consumer is aware of the need and is prepared to address it with a product or service.
- Interest– Consumer engages with the information and seeks to address the need.
- Desire– The consumer has entered into a decision making process.
- Action– The customer has decided to (not) purchase the product.
The McKinsey Quarterly, June 2009, Issue saw David Court and three co-authors introduce a more nuanced view of how consumers involve with brands: the “consumer decision journey” (CDJ).
They devised a model from the study of the purchase decisions of nearly 20,000 consumers across five industries and three continents. The evolved funnel also has four critical parts. They are:
- Consider – The consumer considers an initial set of brands based on brand perceptions and exposure to recent touch points. The journey initiates with the consumer’s top-of-mind consideration like a social media post, a blog post, a suggestion on a review site like G2 Crowd, Capterra, a cold mail, a referral mail, and various other avenues of information gathering. These entire act as stimuli to search about your brand, understand what you do, and consider your relevance to the customer.
- Evaluate – Consumers add or subtract brands as they evaluate what they want. They discuss with peers, read reviews, engage with collaterals on the website, and select (reject) few brands from the list. They deeply understand what they need. It continuously shifts there selection criteria and finally homing on the select few brands that more or less fit their purchase criteria.
- Buy – Ultimately, the consumer selects a brand at the moment of purchase. Here the customers explore and evaluate your product and service placement, packaging, availability, pricing, and sales interactions. It is the most potent and delicate touchpoint.
- Enjoy, advocate, bond – The customer develops deeper relationships after using the product or service. They react negatively or positively based on the experience and spread the word also. When consumers are pleased with the purchase experience, they’ll advocate and become a brand evangelist for it by word of mouth. They create fodder for the evaluations of others and revitalizing and uplifting a brand’s potential. If disappointed by the brand, the customer is more likely to sever ties—or worse. But if the relationship becomes strong enough, they will enter an enjoy-advocate-buy loop that skips consider and evaluate stages in its entirety.
Customers today are more empowered and exposed to various mediums of information. They are more than just the numbers on the sales target board. The sales funnel evolved into what it is today is due to two key reasons.
Firstly, the evolution of available information sources to the customers through which they can interact and influence each other buying decisions. Secondly, human relationships are dearer to companies today. A minor financial setback is recoverable over a period; however, it’s far more challenging to get rid of the tarnished brand image.
How do you make a sales funnel from scratch?
Creating a sales funnel is not an easy task. It takes a lot of iterations and changes until you come up with the right mix that works for both you and the customer.
Therefore, when creating a B2B sales funnel based on either of the above models, there are five basic requirements that you should meet to ensure success.
1. Understand your consumers’ decision journey
2. Determine and prioritize primary touchpoints
3. Find ways to leverage them; and
4. Allocate resources accordingly—it may require you to redefine your organizational relationships and roles.
5. Create and follow a plan
The way you make sales and what message you put out determines the kind of culture you have in your organization. This culture will attract the right customers to you.
How does a B2B sales funnel work?
The sales funnel works based on the prospects’ engagement with the brand. Candidates progress down the B2B sales funnel as they become aware of your products or services through interactions with marketing and sales collaterals on the website, sales representatives, and their interest grows till they finally convert and become customers.
Based on the model you choose apart from the models aforementioned. The numbers of steps vary from 3 to 7 levels. Apart from having different nomenclature, the B2B sales funnels have a singular task, i.e., transform an unaware lead to a paying customer.
The funnel can be into four necessary parts, or we can call it a 4 part customer journey cycle.
1. The first part consumer considers an initial set of brands based on their perception of exposure to various customer touchpoints, e.g., cold emails, ads, social media posts, events, and other digital/non-digital collaterals. It is the awareness stage.
2. Consumer evaluates and removes brands based on their requirements.
3. The consumer selects a brand and purchases at the moment of sale.
4. The purchase of a product or the service becomes an experience, and it builds expectations. The customer comes to buy again and creates more experiences and resets expectations to a new high or low.
Customer Journey Action Plan
Launch a pilot project similar to your original product and research your customers’ journey. Talk to your customers directly and understand all the touchpoints that your customers crossed to arrive at choosing you.
Find out everything possible about our customers: what they see, what they do, and what they say.
Find out what channels they use to research on products, how engaged or mindful in those channels, and what they like to share in those channels. Make minimal assumptions about your customers. Lesser the premises better the understanding.
Find out what products from individual brands would they choose to buy without giving a second thought to it and why. Try to know what is the most hated or liked the advertisement they last saw. Ask them why they liked or disliked it.
With social media monitoring tools find out what people say about your customers. Which is the most relevant keyword for you? Find out what excites them about your customer and one thing they dislike about your competitors.
Find out which channels are available to you for interaction with the customers. Is it the review websites (G2 Crowd, Capterra, Bobsguide, and others), social media (LinkedIn, Twitter, Facebook, VK, and others), specific product review blogs (Gartner Blog) and various other places where they come in contact with the brand directly or indirectly?
Find out of these touchpoints which influence their purchase decision the most and why.
Develop plans for community and social-based initiatives to encourage traffic inflow and build credibility. Aggressively distribute positive third-party reviews across traditional as well as social media to build ongoing post-purchase relationships and encourage brand advocacy for you.
Create an action plan for the customer experience that aligns with the customer journey plan, which will extend the brand boundaries. The details of a customer experience plan vary according to the products, target segments, campaign strategy, and media mix. It makes the movement of the customer between different layers of funnel fluid.
Why Are B2B Sales Funnels Important?
A sales funnel, in simpler terms, is a mapping of the customer decision journey that aligns with your business goals. The worst that can happen to any B2B company is remain ignorant of the current customer journey and blaming low sales and poor results on a slow market or its sales force.
In the beginning, the losses are slower; however, as competitors adapt and get in front of the pecking order, the late or non-adopters will start losing fast till they’re completely obliterated of the market if they continue to be clueless.