Understanding the Sales Funnel - Radio Advertising Calgary
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sales funnel

Understanding the Sales Funnel

Fundamental to any marketing strategy is the concept of a sales funnel. However, it’s not the most intuitive concept in the world and often requires further explanation.

A sales funnel is a visual metaphor for the actions taken by a potential customer as he/she moves down the path to purchase. It’s helpful in understanding the sales process and analyzing the conversion rate between each step in the funnel. For all you visual learners, the sales funnel looks something like this (wide at the top, narrow at the bottom):


sales funnel

sales funnel

Steps in the funnel:

  1. At the top of the funnel, you have “prospective customers” whose attention you will need to initially attract. Prospects include website visitors, newspaper subscribers, magazine readers, or even metro riders who view your ad during their daily commute. This audience is diverse and heterogeneous, and is not necessarily interested in what your business has to offer.
  2. Advertisements or other marketing endeavors generate awareness and educate the prospective consumer about your product/ service. This is considered to be the “cultivation stage” of the sales funnel, where you start to build strong relationships and uncover consumer needs. At this point, you’ve peaked their interest.
  3. Moving down the funnel, businesses begin to strategically position themselves in the eyes of their potential clients. In order to gain top-of-mind awareness, you have to demonstrate your values and clearly outline your unique selling proposition. It should be blatantly clear by this point exactly why someone should buy your product. Here, people are starting to express genuine interest in your business and are slowly becoming stronger and stronger prospects.
  4. As the sales funnel narrows after each progressive step, prospects drop off until what you’re left with is a select base of converted customers. This is your target market. The goal of marketing is to convert the highest amount of prospective leads into paying customers at the lowest possible cost. Businesses close in on their target market by delivering a compelling win-win sales proposal.

Ideally, a business would have so many converted customers that the sales funnel would never taper off, and the end result would be more of a sales cylinder (with the same amount of leads as conversions). However, this only occurs in a marketer’s wildest dreams, for no company – not even the Apples or Nikes of the world—can achieve a 100% conversion rate. So instead of striving for the impossible, it’s recommended that your company draws out a sales funnel of its own, and determines which funneling stages are lagging in terms of conversion rate.

5 Step Marketing Strategy

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