The Invention of the Sales Funnel | Richard Takemura

Sales Funnel Not new:

In 1898, American advertising advocate, Elias St.Elmo Lewis developed a model that mapped the consumers’ journey from the moment a brand or product attracted their attention to the point of action or purchase which was the first sales funnel. He mapped the journey as passing through stages of:

  • Awareness, when the customer becomes conscious of the existence of the product.
  • Interest, when the customer begins expressing interest in the type of product in question.
  • Desire, when the customer aspires to a particular brand or product.
  • Action, the choice point when the customer responds to a specific call to action.

Lewis’ AIDA model (awareness, interest, desire, action) was described as a “sales funnel” in William W. Townsend’s 1924 book, Bond Salesmanship.

“The salesman should visualize his whole problem of developing sales steps as the forcing by compression of a broad and general concept of facts through a funnel which produces the specific and favorable consideration of one fact. The process is continually from the general to the specific, and the visualizing of the funnel has helped many salesmen to lead a customer from attention to interest, and beyond.”

The concept of a “funnel” is a little scary, bringing forth visions of tornados, spider webs, or trapping the poor consumer in a whirlwind. But the sales funnel is one of the greatest inventions since the carpet-bag.
The main forces operating with sales funnels are:

  1. The force of the customers’ original motives–usually it is the desire to own something or the pain coming from the lack of something that is missing in their lives or businesses.
  2. In the case of face-to-face sales, the force of the relationship between the sales professional and the would-be prospect. In many cases a temporary bond develops that holds the visitor in the funnel.
  3. The force of momentum. The sales funnel actually requires some action and decision-making on the part of customers. Once they have invested time and energy in the sales funnel, they have a motivation to continue.
  4. The gradual narrowing of the customers’ options until they are left only with the final action point.
  5. The stubbornness or unyieldingness of the sales funnel that makes escape undesirable or negative and pressures the customers to move forward through the process. The sales funnel is an assumptive selling tool.

Zach Bulygo of Kissmetrics described the sales funnel for B2B transactions in terms slightly different from the AIDA model.

  • The first stage at the broad opening of the funnel, is lead generation (awareness, interest, and evaluation) that results from inbound marketing, referrals, trade shows, events, SEO, ebooks, whitepapers, PR, advertising, videos, direct mail, viral campaigns and social media.
  • The second stage, as the funnel narrows, is lead nurture (customer interest, product evaluation). This stage operates through content marketing, case studies, white papers, videos, drip campaigns, emails, social media, newsletters, ebooks, webinars, and classes.
  • The third stage is sales (commitment, sales decision), brought about by product trials and demonstrations.

The E-business sales funnel:

E-business is a natural environment for sales funnels. In an e-business system, the sales funnel can act as an automated sales professional. The first part of the funnel is not entirely located on the company’s website turf. It is distributed over all the contacts that the company brand makes with the web itself, through the reputation the brand establishes, the name it makes. It is up to the company to establish itself as a go-to business. Widely distributed mentions, mutual links, blogs and conversations bring interested visitors to the open rim of the sales funnel.

Making a sales funnel:

The sales funnel structure is often located on the “landing page” of a company’s website. The entryway to the funnel often looks like an information storehouse. The top of the landing page underlines the expertise of the company and presents the kinds of products and customer responses to the products the company offers.

The landing page begins to look more like a catalog as the visitors proceed through it. The prospects express their tastes and wishes through the interest they express in catalog items.

Then the catalog begins to present product features in detail and provides constructive answers to concerns customers have. At this intermediate stage, the visitors may have become serious prospects who have already made some choices and passed through several layers of action.

Once the prospects have narrowed their choice of products, the web page becomes a closer. The prospects are asked to make a commitment to a product or they can go no further. The page narrows to a selection and purchase section where financial information and shipping information are requested and the commitment to the sale is confirmed.

The sales funnel is also a screening process. The understanding is that every sales process starts out with a large number of visitors at the wide top of the funnel and end with a much smaller number of people who actually commit to a sale. The chief metric for the success of the funnel is the ratio of number of visitors entering the funnel at the information stage against the number of visitors who actually make purchases or commitments.

The landing page is invaluable for collecting metrics about the company’s e-sales operation and the power of its inbound marketing. The sales funnel system can collect metrics like the number of visitors who pass through each part of the system, so that blockages in the way prospective customers react to each section  and time spent in each section or each item can be tracked. In addition, early stage information collection areas in the funnel can obtain future contact information like e-mail addresses. Potential customers can be added to mailing lists as well.

Richard Takemura is an experienced all around marketer and entrepreneurial coach who can show you plenty of tricks and tips as well as knowledge and practical ideas. You can contact him to learn more.

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