In the entrepreneurial world, there are basic concepts and strategies that every entrepreneur should have in their dictionary. And one of them is the sales funnel. At La Lonja de la Innovación we help startups to understand in what consists this strategy and we advise them in its creation, but for you to understand it better too, we have this post in which we explain more about sales funnel
How does a sales funnel work?
The sales funnel is the complete sales process, from the start to finish, that is, it goes from the arrival of potential customers to their conversion into actual customers. Metaphorically, it is like a funnel in which a large number of potential customers enter through the upper part, and as they progress and the funnel narrows, they get filtered until only those who ultimately end up buying, registering, or meeting your company's final goal remain. In short, it's a way to measure and better understand potential customers, with the goal of achieving a higher conversion rate.
This is a great tool for filtering out those users that won’t end up being useful for achieving your objectives, allowing you to focus your resources on those who will. As potential clients go through the different phases of your funnel, they become more familiar with your brand, and you get to know them better. This way, you can properly qualify them and increase your conversion rate by turning a higher number of prospects into actual customers.
After all this, it is evident that the benefits of a sales funnel are not just a few:
- Boost your company's productivity. By going through different phases where you know what to use, you avoid wasting time, money, and personnel.
- Identify new business opportunities. Analyzing customers and their behavior can reveal new market opportunities.
- Helps you better understand your customers and their needs. By gaining a deeper understanding of your customers, you can improve your strategies to better meet your audience's needs.
Stages of the Sales Funnel
It is clear that throughout the sales funnel there are various stages, each with a different objective, requiring different strategies:
- Brand Awareness (Attract). This is the top of the funnel, where the goal is to attract the audience to start getting to know you. People begin to learn something about your brand, and you need to bring them closer to you through your various marketing channels.
- Consideration (Inform). We move to the next stage, where your potential customers already know you and start to show interest in your brand, even considering some of your products or services. At this point, they are likely comparing the different options they have to meet a need. Therefore, it is crucial to inform them about your product or service and highlight your competitive advantages to make them choose yours.
- Conversion (Convert). In this stage, potential customers already have the intention to buy and want to acquire the product or service. Your task here is to accompany them and facilitate the purchasing process, registration, or whatever your final objective may be.
- Loyalty (Engage). Finally, it's important to know that your relationship with the customer doesn't end here. Once the conversion is made, their data is recorded in your system, and you can use it for future marketing actions to increase loyalty and encourage repeat purchases.
All of the above makes it clear that the sales funnel is a great tool for every entrepreneur. If you understand the different stages users go through in the sales process, you can optimize it and improve conversion. Therefore, from La Lonja de la Innovación, we encourage you to start designing your sales funnel and take your business to the top. Additionally, don’t miss the rest of the tips we share through our blog, and remember that you still have time to join our acceleration program through our year-round open call.