Aaron Hoos

There are a lot of terms for sales funnels. This brief post explains why I prefer the term sales funnel instead of the many other terms that people use to describe the relationship between a potential buyer and potential seller.

When people search online to find information about the relationship between a potential buyer and potential seller, they use some of the following popular terms to find the information that I define as a sales funnel:

• Marketing funnel
• Marketing pipeline
• Sales funnel (plus two common misspellings: sale funnel, sales funnell)
• Sales pipeline
• Sales process

WHY I PREFER THE TERM ‘SALES FUNNEL’

Why I prefer sales funnel over marketing funnel or marketing pipeline: Ultimately your business exists to earn money and you do that by making a sale. What actually makes up a sale may be different in your business than it is in other businesses, but it’s the sale that counts in your sales funnel, not the marketing. Marketing is a means to an end. By calling it a sales funnel instead of a marketing funnel, the emphasis is placed on the desired goal.

Why I prefer sales funnel over sales pipeline: In my opinion, sales funnel is a strategic term that describes the relationship you have with various stages of potential buyers – you’re not only building a relationship, you’re also qualifying and filtering. Therefore, the number of people you meet earlier in the relationship is quite high compared to the number who actually buy from you. Sales pipeline (again, in my opinion) is a tactical term. It’s a way sales people describe the group of potential buyers who are somewhere in their sales funnel. I’d say that these terms are relatively interchangeable but I prefer sales funnel over sales pipeline because the relationships you have with your prospective buyers is best represented and planned through a funnel shape.

Why I prefer sales funnel over sales process: You’ll find that I do use the word sales process frequently in my blog. However, when I say sales process, I’m referring to the actual interaction a salesperson has with a potential buyer in the Prospect stage: A sales person will build rapport, fact-find, present a solution, handle objections, and ask for the order. That’s the sales process, in my opinion. The sales funnel is a graphical depiction of the relationship that the buyer and seller have from the earliest stages through the sale itself and well past the sale.

So, if you’re looking for information on marketing funnels, marketing pipelines, sales pipelines, and sales processes you’ll probably find it on this blog. But I call it a sales funnel.

Every sales funnel looks different: One company might sell services through a lengthy relationship-building effort; another company might sell a product as an impulse item at the cash register of a grocery store. However, all sales funnels share a few things in common.

Below, I’ve listed five of the most important elements you’ll see in every successful sales funnel. And if your sales funnel is struggling, check to make sure that you’ve mastered these elements first.

1. Value: Your potential buyers have problems they want solved or needs they want fulfilled and the sales funnel relationship is your way of telling them that you have the solution or fulfillment they’re looking for. But Prospects are only motivated to buy from you when they perceive value. That is, your ability to solve their problem or fulfill their need must actually make it worth their time, effort, energy, and money to listen to your sales pitch and hand over their hard-earned money. I call this the pickaxe factor.
2. Target market: No business can be all things to all people so every business must have a well-defined target market. It can be a big target market, and it can even include several different markets, but the target market(s) need to be well-defined. When you know who is most likely to buy from you, you can shape your marketing and sales content to speak to that group in a way that will compel a buying response. (Find out why ‘everyone’ is not your target market).
3. Clear next steps: A poor sales funnel haphazardly dumps marketing content in a variety of channels (Facebook, Twitter, a blog, an article directory, etc.) and the business hopes that the sales funnel contact will click around to gather enough information to move forward in the sale funnel. But that’s not how it works. A sales funnel contact has a mindset and that mindset slowly evolves over time. The business’ job in marketing and selling is to speak directly to the contact’s mindset and slowly nudge that mindset to evolve toward full acceptance of what is being offered. (Read a previous blog posts about how mindsets work in a sales funnel and how you use steps to move contacts forward in your sales funnel).
4. Opportunity to buy: I’ve said this before and I’ll say it again: Marketing is sexy and fun and difficult to measure. Selling, on the other hand, is challenging and sometimes a grind, and there can be a lot of rejection. Therefore, businesses tend to do too much marketing and too little selling… and then business owners scratch their head and wonder why no one is buying. A good sales funnel includes moments (in the Prospect stage) where the seller asks the Prospect if they would like to buy. (Read a previous blog post about this very topic — how a lack of selling is causing sales funnel failure).
5. Profitable sales: Successful sales funnels have a track record of profitable sales. Okay, some of you are reading this and thinking “duh! Isn’t that obvious?” but it may surprise you to learn that it’s not. Businesses use a variety of measurements to define success. Things like: “Do we have a great logo?” or “Is our blog being visited by more than 100 people per day?” etc. Even businesses that do strive for profitable sales don’t always measure profitable sales as much as they measure other things. (I confess, I’ve been guilty of that in the past, and here’s an example of a client whose sales funnel was not focused on profitable sales). But the only thing that should determine whether or not a business is successful is: Does the business have profitable sales? If your business does not have as many profitable sales as you’d like, take a closer look at your sales funnel to determine how you can make more profit from your sales.

Does your sales funnel have all 5 of these elements? If your business is struggling, you might want to think about destroying your sales funnel and starting over again from the ground up to make sure that these 5 elements are there. (Here’s a 3-step process to help you or read about how to retrofit the sales funnel in an existing business).

There are other reasons that a sales funnel might be very successful or not successful at all, but these 5 elements are going to be the 5 biggest factors that you can influence to create watershed change in your sales funnel… and ultimately in your business.

By their very nature, people don’t like change.

Sure, life is a constant state of change — children turn into adults, they go away to college, they buy a house, they get a job, they meet someone, they have children, etc. Those are all big changes. But in general, people don’t like a lot of change in their lives. They drive the same kinds of cars, they hang out with the same kinds of people, they don’t take a lot of risks, they aspire to a life of status quo.

People are skeptical (and even fearful) of change because change is risk… and people are risk-averse.

So, when you have a Prospect in your sales funnel and you are presenting them with an opportunity to buy, they may cognitively understand that the product or service will help them, but their risk-averse instinct tells them that an agreement to buy is risky… and risk is bad.

In my experience, people are fearful of the following four risks (in the context of a sales funnel), and these four risks will keep people from buying:

• Losing money (i.e. paying for a product that turns out to be worthless)
• Losing time (i.e. spending time purchasing the product and then not finding it helpful, or needing to work longer in order to “earn back” the money lost on a useless product)
• Losing effort (i.e. spending time and energy to use a product that is not valuable, or needing to work longer to “earn back” the money lost on a useless product)
• Losing face (i.e. being embarrassed in front of family or friends because of a purchase)

I think there are many other risks that keep people from buying — the risks of losing freedom, privacy, and assets, for example. But the four risks I’ve listed above are the four I’ve seen to be the most common and the biggest fears that keep people from buying.

When people feel these risks, they will give the seller all kinds of objections (some will be related to the real risk they are feeling but many will be totally unrelated, as a sort-of unconscious smoke-screen).

If you want to get people to buy from you, you need to overcome these risks by doing the following in your sales funnel:

1. Address objections head-on before they can even be asked by the customer. Read a previous blog post about 8 ways to destroy objections before they are asked, and read a Weekly Sales Funnel Challenge blog post where I gave an objection-handling example.
2. Overwhelm them with value. Read a previous blog post where I talk about the reason why people are afraid to buy, and blog post about something called the 9X problem, where people are afraid to move off of the status quo.
3. Use guarantees and measurable assurances (including testimonials).