A sales funnel is a visual tool that outlines the steps of a sales process, with at least five levels: identifying a target market, attracting potential customers, qualification, quoting a price, and closing the sale. It is used to train new sales reps and can be applied to any sales industry.
A sales funnel, also known as a sales pipeline or marketing funnel, illustrates a specific sales process. While typically depicted as an illustration, this is just a visual tool to help people working in sales understand the general approach that should be taken to successfully complete a specific sales objective. The sales tips and text for each illustrated sales funnel may vary depending on the type of business or organization it applies to, but the basic sales process for each marketing funnel is essentially the same.
Commonly used to train new sales reps, seasoned salespeople have also been known to refer back to sales funnel illustrations from time to time as a reminder of how the sales process works. Although the precise illustrations vary, they all begin with a drawing of a funnel divided into different horizontal levels. Each level represents an important element of the overall sales process.
Most of the time, a sales funnel has at least five different levels, but some can have more. The five essential levels are: identifying a target market; contacting or attracting potential customers in that market; qualification of interested candidates; quote a price for the product or service being sold; and closing the sale. At each level of the funnel, the number of potential customers decreases. This serves to remind sales reps that while a large number may fit at the top of the funnel, many will naturally be weeded out at subsequent levels. Taking this view helps reps focus more on prospects at the bottom of the funnel who are real customers, as opposed to lamenting lost prospects closer to the top of the funnel.
The basic theory of a sales funnel can be applied to any sales industry and can be detailed to suit the exact business or industry in which it is being used. Popular in personal selling, real estate, and other marketing programs, most salespeople become familiar with the sales funnel early in their sales marketing careers. As a training and motivation tool, it serves to help sales recruits better understand the company’s overall marketing approach. Experienced salespeople may or may not have an actual illustration of the sales funnel, but most keep a visual idea of the funnel in mind throughout their careers as a reminder of how the sales process works in general.
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