The Online Sales Funnel

Posted on December 2nd 2013

The Online Sales Funnel

online sales funnelThe primary purpose of online marketing is to influence consumers to take action – whether it be purchasing a product (online or offline), employing your services or executing some other call to action. When consumers engage in this action process – when they purchase, engage or perform a call to action – we have the ability to visually represent their path as they (a) view your advertising media, (b) reach your website, (c) receive marketing information and (d) convert into customers.

We as marketers must be able to map the ‘milestones’ that consumers pass through as they go through their decision making process; and by being able to do so, we can measure each milestone’s effectiveness and optimize accordingly. This ‘path’ or ‘funnel’ your consumers travel through is called your ‘online sales funnel’.

Say hello to your closest online ally: your online sales funnel.

An online sales funnel is not a whole lot different from a traditional sales funnel – consumers are collected, qualified, convinced and then converted into customers (possibly even brand advocates, if they love what you have to offer). You should view your online sales funnel like your sword (if you were on the battlefield, of course) or your engine – the more you understand how your sales funnel acts and reacts to your consumers, the more effectively you can test and optimize it.

Your online sales funnel is like the ‘road map’ or process that consumers go through from the moment they become a prospect, to the moment they purchase. When was the last time you took interest in a product, spoke to a salesperson or visited a website, researched information (which is actually marketing material) and then purchased a product? Chances are it was recently, right? Bingo: you were in a sales funnel. And if you researched completely online, signed up for a free report and saw banner ads about the product until you purchased, you were in an online sales funnel.

First Step: Top of the funnel

The top of the online sales funnel is the largest, and is where traffic is collected from various sources, including (but not limited to):

  1. Organic traffic (this is managed via Search Engine Optimisation)
  2. Paid Search traffic (this is Pay Per Click advertising, on search engines)
  3. Banner Advertising traffic (this is Pay Per Click or Pay Per Impression banner advertising)
  4. Social Media Marketing traffic
  5. Email Marketing traffic

It’s important to note that all forms of traffic aren’t suitable for all funnels; the nature of the inbound traffic will depend on the nature of the product (and the budget of the organization). It’s also important to remember that the five tools used for traffic generation above must be optimized individually, to produce qualified traffic: there’s no point in filling a sales funnel with grossly unqualified traffic.

Middle Step: Qualifying Traffic

The next step of the funnel is qualifying traffic. In many cases, an organization’s website will pre-qualify consumers, and most of the traffic sources above should go through a pre-qualification process in some way.

Some traffic will drop from the funnel here, and only sufficiently qualified traffic will remain in the theoretical funnel.

Final Step: Converting Traffic

The last step of the funnel is convincing and converting traffic into becoming customers (or performing any other desired action). Many websites have strategic ‘direct response’ copy, email autoresponders and banner remarketing strategies designed to automatically convince and convert traffic – hence the term ‘online sales funnel’.

You should treat your online sales funnel like a high performance sports engine. Think of your sales funnel as the highly efficient process of converting website traffic into customers (like an engine converts petrol in to motion). You should use all things available to you to make sure you know about bottlenecks and other ‘areas of friction’ that may prevent consumers from advancing through your sales funnel.

Basic vs. Advanced Sales Funnels

Sales funnels can be super simple, or very complex – depending on the transaction value and ‘needs’ analysis (Remember Maslow’s hierarchy of needs?) of the product. Simple online sales funnels involve traffic generation, an optimized website (with carefully written sales copy and a frictionless conversion path*) and an effective lead follow up system (where inquiries are quickly followed up, or a purchase is delivered). More complex sales funnels involve multiple lead sources.

Understanding your online sales funnel will help you understand how to use theories and tools such as conversion rate optimization, email autoresponders, email marketing and social media marketing.  Knowing the theory behind a sales funnel will empower you to produce a lean and powerful online marketing campaign or website.

If you understand the concept of an online sales funnel, you can strategically use online marketing tools to strengthen your funnel and therefore achieve and exceed your digital business goals. By identifying how each component of the sales funnel works, it’s possible to optimize it to ultimately produce a strong ROI.

(sales funnel / shutterstock)

Ben Sweetlove

Ben Sweetlove

Ben is a digital communications, web marketing and social media evangelist, with experience in regional, national and international branding and lead generation campaigns. Collects hip hop records and new keyboard shortcuts.
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