Innovation Alphabet
Sales Funnel
In a nutshell
Every customer slips through the different stages of a process before finalizing a purchase. But not everyone makes it all the way through: some get lost in the layers of the sales funnel. This is not a Takeshi’s Castle challenge, but a model used by companies to set up the sales process and analyze its condition.
Steps
Companies use the sales funnel to sift through contacts until they identify and retain those that could become new customers. The greater the attractiveness, the greater the number of sales. But a deep understanding of the funnel can help improve estimates of buyer acquisition costs and understand which method is most profitable. Or it can increase the accuracy of predictions about future purchases.
As previously mentioned, the sales funnel is divided into a series of consecutive layers, which could be summarized as follows:
• Awareness and Discovery: Potential buyers become aware of a problem and begin to inquire about how to solve it. Companies must, therefore, create content that can attract leads so that customers are aware that a solution exists.
• Interest: Prospects show some interest in the product or service offered by the company and try to learn more about it.
• Decision: Customers make a decision and, if positive, negotiations can begin. Sales teams, of course, must be skilled in influencing the target choice.
• Purchase: The ultimate goal is achieved: the potential customer has become a buyer. The sales team will make sure to reach a deal that can satisfy both parties.
Application Fields
• Marketing: This is the first sector to benefit from the help of the sales funnel because it enables companies to attract new stakeholders and customers with the goal of increasing and optimizing sales. As a result, marketing teams will also need to adopt strategies, tools, and tactics to get through each step of the sales process.
• Communication: The sales funnel can act as a framework to help build an appropriate communication structure to guide the new customer all the way through the funnel. A funnel allows communication to be managed in a simpler and more organized way, as it traces a predetermined path to identify potential customers.
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Industries
• Sales Funnel in the audiovisual industry
The most successful streaming platform, Netflix, has a simple and intuitive style. The potential new customer is welcomed to the homepage of the site with a reduced text section that nevertheless provides all the necessary information, such as pricing and services. To further support the undecided, by scrolling down it makes immediately available a section containing the main FAQs. Not enough? Then here’s a thirty-day free trial so that interested people can actually test the service. Ninety-three percent of users who binge-watch for a month confirm their subscription.
• Sales Funnel in the marketing industry
The French company Sendinblue is doing particularly well in the marketing field. The site that welcomes new customers perfectly follows the multi-step sales funnel model, as is divided into different areas according to the degree of user interest: general information, technical features of the service offered, and finally the call-to-action, which can lead to purchase or free trial.
• Sales Funnel in the E-commerce industry
Groupon, a site on which you can get advantageous discounts in many types of businesses, has set up an explosive sales funnel by welcoming new customers with a discount pop-up on their first purchase. A strategy that not only tempts visitors to immediately take advantage of the coupon, but also aims for quick retention.
Business Functions
• Sales Funnel and customer service
HelpScout provides an all-in-one customer service platform which offers the user to start a free 15-day trial or get a demo to see the platform in action. If a prospect signs up for a demo, they find themselves in HelpScout’s sales funnel. Additionally, HelpScout utilizes an email marketing service to send the prospect information prior to their scheduled demo.
• Sales Funnel and webinars
SmartPassive Income’s free webinar sales funnel gives them the chance to build a personal connection with their leads. Webinars can make prospects feel closer to the company, especially if they’re trying to know more about the solution being offered, the pain points potentially solved, and FAQs. This is a pretty smart solution, because 72% of consumers prefer to watch a video over reading an article.
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Check out more of the Innovation Alphabet:
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Advanced Analytics
Advanced Analytics
The term “Advanced Analytics” refers to the ability to autonomously or semi-autonomously analyze data and content to identify correlations, develop analyses, predictions, and recommendations. It is not just a matter of collecting information and then organizing it into watertight compartments: the ultimate goal is to identify a dialogue pattern from a data-driven perspective.
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Agile
Agile
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Ansoff Matrix
Ansoff Matrix
The Ansoff Matrix is a marketing planning model that arises from the intersection of new and existing products and markets. It derives four possible strategies for expanding the company’s market, which are built around four variables with a changeable factor of risks and possibilities: existing product, new product, existing market, new market.
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Artificial Intelligence
Artificial Intelligence
Artificial Intelligence is not strictly defined. Basically, it is a computer system able to make decisions in an independent and flexible way. A good AI application can perform everyday tasks better than an average person (e.g., identifying other people from their photos on social media or beating the best chess player). Nothing to fear, then. Unless you are a chess champion.
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Artificial Scarcity
Artificial Scarcity
We often tend to desire what we cannot have. Or what we are in danger of losing: Artificial Scarcity is a strategy that flaunts a limited number of items that do not correspond to actual availability. The goal is to stimulate the perception in consumers that the stock of items is about to run out and thus create a need based on the “fear of being cut off” or the intention to buy the item in order to resell it at a higher price.
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Attack Surface
Attack Surface
The term attack surface refers to the part of a system that may be subject to attack or breach by hackers. The smaller that surface is, the easier it will be to protect it. Indeed, the Internet is an ocean of deep, dark waters: those who navigate it must be aware that they are exposing themselves to a flood of digital risks. Yet, ironically, we do not need a big boat to shelter us.
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Augmented Reality
Augmented Reality
Augmented Reality is an ever-evolving technology that overlays multimedia information on top of our common sensory horizon to gain a deeper understanding of our surroundings. No, it doesn’t allow you to step out of the Matrix dream simulation, nor can it be accessed by swallowing a red pill. But neither is it the disturbing experience of the Playtest episode of Black Mirror.
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Balanced Scorecard
Balanced Scorecard
In business, as in life, you need balance. The Balanced Scorecard is a holistic tool for strategic management. It offers, in fact, the possibility of assessing corporate performance in its wholeness. An overview that embraces four perspectives: the business/financial side, customers and stakeholders, internal processes, and learning and growth.
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