A Beginner’s Guide To The Sales Funnel

Estimated Read time: 7 minutes

“The customer’s perception is your reality.” – Kate Zabriskie Source

Take a minute to imagine the world 10 years ago. The burgeoning AdTech space was becoming more complex, and inventory sources such as video and digital radio were introduced to get in front of customers where they were spending more and more time–online. Instead of the Yellow Pages, people were searching Google to find their desired information. Instead of watching traditional cable television, people were turning to YouTube for free video content. As a result, selling to those consumers had to adapt in order to meet the growing needs of a tech savvy consumer.

The Sales Funnel: The Old vs The New

Marketers and sales-people alike had to change their tactics to meet the needs of new customers. With the rise of online resources where consumers could go to find information, buyers no longer exclusively depended on sales people to make a decision. That meant that the traditional consumer journey was no longer a linear path to purchase, but rather a dynamic and fluid process because of changing consumer behavior. This blog will take you through the fundamentals of the traditional sales funnel and will walk you through how to adapt that model to meet the modern day needs of your customer. You will learn what the sales funnel is, why it matters in the first place, and how to leverage it for your customers.

The Sales Funnel Model

This image shows the traditional sales funnel. 

The sales funnel is a model based on the assumption that a consumer goes through different progression stages before making a purchase. While the stages are still relevant, the key is to figure out how that applies to the digital consumer. 

How It Works

Here is an example of how the digital sales funnel works from start to finish, when buying a car in today’s tech savvy world:

Imagine that you’ve decided that you want to buy a new car. Great! You immediately drive to the lot, buy the car, and drive away. It’s that simple, right? Wrong! You wouldn’t necessarily buy an expensive new car if you didn’t know it existed (branding phase) nor would you purchase that new car without considering the cost, added features, and benefit to your daily life (consideration phase). Finally, you wouldn’t purchase a car without going directly to the dealership to make the purchase and drive off the lot with your brand new car (conversion phase). Throughout that process, effective advertising can influence your decision to buy, whether you are conscious of it or not. To learn more about the psychology of priming, click here.

Why It Matters

 Knowing what the sales funnel is and identifying a customer’s journey from brand awareness to final conversion is key to creating a successful digital campaign. If you only run a branding campaign, for example, you will miss out on converting leads. On the other hand, if you are only running a bottom of the funnel campaign, you lose out on bringing in new prospects, which starts with exposing your brand to new people. In fact, a recent Stanford research study titled "Display Advertising Impact: Search Lift and Social Influence" found that users who are exposed to the advertising campaign submit 5% to 25% more queries that are relevant to it compared to the unexposed users. In other words, display advertising drives search keyword volume. 

How to Build a Successful Digital Strategy

 A successful digital strategy should encompass the entire online customer journey, rather than focusing on just one stage. As the research above indicates, digital platforms influence consumer behavior in other areas online. Therefore, if you have a full funnel strategy in place, you can be confident that you have the best strategy to bring in new leads and retain existing customers.

Common Mistakes Marketers Make

A common mistake is only targeting one stage of the sales funnel. The customer’s perception is your reality, so you need to build a strategy that conforms to their journey. If you only focus on one part of the sales funnel, you risk losing potential customers who aren’t in that stage. Think back to the car buying example. You wouldn’t have known about that special car without prior exposure. On the other hand, you wouldn’t have visited that specific dealership if they had the wrong address and phone number listed after a quick Google Search. The successful conversion resulted in following the customer throughout the entire sales cycle.