insights | 09.04.2024

What is the sales funnel?

Article topics
  1. So, what is the sales funnel?
  2. The different stages of the sales funnel
  3. How long does it take for customers to move through the funnel?
  4. How can you use the sales funnel to your advantage?
  5. Can customers skip certain stages of the sales funnel?
  6. Top tips for optimising your sales funnel
  7. Xigen: your eCommerce digital marketing specialists

Not everyone who visits your eCommerce store will have the same intentions.

Some will be carrying out research. Others will be comparing prices and features. A small handful of visitors will be ready to buy there and then.

Understanding what stage of the purchasing process your customers are at can help you fine-tune your messaging to appeal to the right people.

Let’s look at the sales funnel and how you can apply it to your marketing.

So, what is the sales funnel?

The sales funnel (also referred to as a marketing funnel) represents the different stages a potential customer goes through to make a purchase. These stages are:

  • Awareness
  • Consideration
  • Preference
  • Purchase
  • Loyalty
  • Advocacy

It gets its name from its shape – wide at the top and narrow at the bottom, like an inverted pyramid. This is because a proportion of people drop out at each stage. So, for example, if 100 prospective customers enter the funnel at the top, only 10 may exit at the bottom.

You may hear the different stages of the sales funnel referred to as TOFU, MOFU, and BOFU. These acronyms mean top of the funnel, middle of the funnel, and bottom of the funnel.

As a rough guide, TOFU refers to the awareness stage, MOFU refers to the consideration and preference stage, and BOFU refers to the purchase stage and beyond.

The different stages of the sales funnel

How does the sales funnel apply to your eCommerce store? Let’s look at the six different stages in more detail.

The awareness stage
The one where:
You’re showing customers that they have a problem that needs solving
Ideal marketing channels:
Blogs, videos, social media posts, SEO, PPC advertising

At the awareness stage, many of your potential customers won’t know who you are. They might not even realise they have a problem that needs solving. The awareness stage is all about advising your target audience about an issue they have and the potential solution.

The consideration stage
The one where:
You’re showing customers that you can help solve their problems
Ideal marketing channels:
Case studies, testimonials, email marketing

At the consideration stage, you’re introducing your company as a solution to the problem they’re experiencing. It’s important to show that you’re a trustworthy and credible option, especially if it’s the first time a customer has heard of you.

The preference stage
The one where:
You’re showing customers that you’re the best choice
Ideal marketing channels:
Free trials, comparison articles, discount codes

At the preference stage, your potential customer is carrying out research. They may be comparing you to your competitors at this point, so it’s vital to know which other eCommerce businesses you’re up against.

You want to demonstrate your value and show what makes you stand out from the crowd.

The purchase stage
The one where:
You’re encouraging customers to buy from you
Ideal marketing channels:
Shopping cart abandonment emails, retargeting ads, live chat

Your customers have weighed up all their options and have decided to buy from you! However, it’s crucial to ensure the process is as smooth as possible, as there is still the risk that they could change their mind.

43% of UK shoppers admit to abandoning their online baskets at the last minute to check the price on Amazon!

The loyalty stage
The one where:
You’re encouraging customers to buy from you (again)
Ideal marketing channels:
Loyalty programmes, exclusive offers

You might think the sales funnel ends at the purchase stage. However, it’s essential to encourage customer retention. Studies show that it costs five times more to acquire a new customer than it does to keep an existing one.

The loyalty stage is about encouraging existing customers to buy from you again. It’s vital to make customers feel valued and show them you appreciate their business.

The advocacy stage
The one where:
You’re encouraging loyal customers to recommend you to other people
Ideal marketing channels:
User-generated content, online reviews, referral schemes, brand ambassador programmes

The very end of the sales funnel, not all customers make it to the advocacy stage. However, the customers that do are extremely valuable.

The advocacy stage is when repeat customers become advocates for your brand, recommending your eCommerce store and the products you sell to others. It’s critical to provide all the resources and help they need to do this.

How long does it take for customers to move through the funnel?

It depends on what industry you’re in and what you sell. As a general rule of thumb, the less expensive the product you sell, the shorter the time it takes for a customer to make a purchase decision.

Let’s say you sell pairs of socks for £5. Customers may see your marketing, go to your website, and buy straight away, moving through the sales funnel in a matter of minutes.

If you sell £5,000 holidays, the process will take much longer. This is a significant investment, so customers will want to research and compare what you offer with similar businesses before handing over their money.

How can you use the sales funnel to your advantage?

As customers at different points of the sales funnel have different needs and wants, it’s important to market your business to them accordingly.

Let’s go back to the £5,000 holidays we talked about earlier. Here’s how you can optimise your sales funnel to increase the odds of people staying in the funnel and buying from you.

  • Awareness. At the start of the sales funnel, your prospective customers might not know they need a holiday. Inspirational social media posts of stunning destinations will show them that a fantastic holiday is just what they need to relax and recharge. SEO-optimised blog posts can also spur them on to sign up for your mailing list
  • Consideration. Now that your prospective customers know they need a break, you need to demonstrate why they should buy from your business. Testimonials from satisfied customers and email campaigns demonstrating your unique selling points are great options
  • Preference. At this point, your customers want to buy from you, but they need that all-important nudge. A high-quality, easy-to-navigate website will provide all the information they need and show that you offer an exceptional customer experience
  • Purchase. Your hard work has paid off, and your customer is ready to buy from you. Retargeting ads on social media and the Google Display Network can entice customers who didn’t convert the first time around back to your site
  • Loyalty. How do you get customers to buy more holidays from you? Enrolling them to a VIP mailing list where they get exclusive deals can make them feel like part of a special club
  • Advocacy. If you want your existing customers to promote your brand to family and friends, it’s essential to give them something for their efforts. Implementing a referral scheme means they benefit every time they promote your business

Can customers skip certain stages of the sales funnel?

Yes! While most customers will progress through the sales funnel stage-by-stage, some might skip stages.

For example, imagine someone desperately needs a last-minute gift for a friend. They may reach the awareness stage and move straight to the purchase stage as they don’t have time to consider other gift ideas.

People can move backwards in the sales funnel too. For example, let’s say someone is in the preference stage and is nearly ready to buy a holiday from you. However, they then need to use their money to fix their boiler. A year later, when they’re ready to buy again, they’re back at the consideration stage, contemplating all their options.

Alternatively, someone at the advocacy stage of the funnel may have a negative customer experience and may rethink recommending you to others.

It’s important to stay flexible and consider individual customer needs. For example, in the case of the customer who had a negative experience with your brand, what can you do to make them happy again?

Top tips for optimising your sales funnel

Here’s a scary statistic: nearly 70% of companies haven’t attempted to identify a sales funnel. This means that if you make the effort, you’re in a fantastic position to nurture customers and make more sales.

Here are our expert tips for optimising your funnel and seeing success.

Look at where customers are dropping off

When it comes to the sales funnel, the aim is to get prospective customers from awareness to purchase as smoothly as possible.

While it’s natural that not everyone will make it from start to finish, it’s crucial to identify if more people than normal are dropping out at a particular stage. This could be a sign that your marketing isn’t working.

For example, if a significant number of people abandon the funnel before the purchase stage, it could mean an issue with the buying process. Simplifying your checkout, providing additional payment options, and offering guest checkout could encourage more people to stay in the funnel.

See what type of content your customers like the most

Even if you know your target audience inside-out, it can be hard to gauge what content will drive them through the sales funnel. Even the smallest things like changing the text on a call to action button can make all the difference.

Conversion rate optimisation is the science of making changes to your website to see what leads to the highest conversion rates. Once you’ve reviewed your data, you can use A/B testing to test your hypotheses.

This is when you have two nearly identical versions of a webpage or a piece of content (for example, a Google search ad) with one slight change. You can then see which version drives the most conversions.

Keep on top of trends and changing preferences

Once you’ve identified your sales funnel and the touchpoints that determine which stage customers are at, it’s vital to keep on top of digital marketing trends. This ensures you’re using the right marketing channels and can stay ahead of the competition.

For example, take social commerce. Social networking platforms are constantly changing and enhancing the experience, with TikTok launching its shopping platform across selected countries in 2023. It’s important to understand how these changes affect your sales funnel and how you can take advantage of them to appeal to customers.

Keeping a close eye on your metrics can also help you identify how well you’re doing at each stage of the funnel. Here are some of the best metrics to monitor.

Awareness Consideration Preference Purchase Loyalty Advocacy
Website traffic, social media engagement, email open and click-through rates Email click-through rates, case study and testimonial views, webinar attendance Live chat conversations, demo and trial signups, consultation bookings Revenue, conversions Repeat customer rate, customer lifetime value, net promoter score Social media mentions, backlinks, online reviews, influencer marketing ROI

Check out five awesome eCommerce metrics to give your store the advantage.

Spend time on all areas of your sales funnel

One of the main reasons businesses lose customers is that they focus all of their efforts on certain points of the sales funnel and neglect customers in others.

For example, let’s say you dedicate all your time to finding new customers (awareness). While this means many people enter the sales funnel, most prospective customers will quickly drop out if you don’t demonstrate your value to those in the middle of the funnel.

Similarly, it’s vital to invest time and resources in nurturing customers after they have made a purchase. This is so they don’t just return to your store, but encourage others to buy too.

Xigen: your eCommerce digital marketing specialists

Once you know where potential customers are in your sales funnel, you can focus on optimising your marketing channels to keep them invested. This leads to more conversions, more revenue, and happier shoppers!

At Xigen, we specialise in digital marketing for eCommerce stores. From PPC advertising to email marketing campaigns, our team of experts plan, develop, manage, and optimise campaigns that enthral your customers and keep your sales funnel busy.

Get in touch today, and let’s get your sales funnel in check.

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