Sales Funnels 101: How does a sales funnel work?

A sales funnel is a graphical depiction of the interaction you have with your prospective buyers over time. (For more information about this, see my previous Sales Funnel 101 blog post entitled Why is a sales funnel funnel-shaped?)

A sales funnel is made up of several stages, each one representing a stage in the relationship between a buyer and a seller.

Many people have theorized about the number of stages in a sales funnel — some theorizing 2, 3, 4, 5, 6, 7, or more. I think each of these theories has something valuable to add to our consideration of sales funnels. However, in my work on sales funnels, I have tried to consistently use 5 stages, just so my readers have a reference point.

AARON HOOS’ 5-STAGE SALES FUNNEL

The 5 stages I’ve identified as being typical stages in sales funnels are:

  1. Audience
  2. Leads
  3. Prospects
  4. Customers
  5. Evangelists

Each stage represents a distinct mindset change for your sales funnel contact.

Contacts at the Audience stage think very different things than contacts at the Customer stage. (Audience-stage contacts barely know who you are. Customer-stage contacts have trusted you enough to give you some of their money in exchange for a product or service).

At the top of your funnel are the Audience-stage contacts who barely know who you are and are just looking for basic information about a problem or need that they might or might not be aware of. The Audience is the widest part of the sales funnel.

Your job as a business owner/entrepreneur/salesperson is to take in lots of contacts in the Audience stage and move them through each stage of the sales funnel until they become Customers. Then, to continue to move them through the sales funnel to make them into Evangelists (so they’ll happily talk about your products or services with their peers).

You move them through your sales funnel with marketing activities and sales activities — and ultimately a relationship.

Not everyone will move through at the same speed, and some contacts will fall out of your sales funnel at each stage. That’s okay; it’s expected. But the ones that stay in your sales funnel, that you build a trusting relationship with, will become Customers (and ideally Evangelists). Customers and Evangelists are at the narrowest part of the sales funnel.

For more information and a picture of the sales funnel, Download my Sales Funnel Quick Reference sheet.

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