Definition – What is a Sales Funnel?

Every sale your business will make follows a predictable progression of phases that, if completed, will lead to a sale. This is the “sales funnel,” and the way in which its navigated will determine whether you reach the phase where a deal is closed.

Although all businesses and sales have unique characteristics, the broad phases of the sales funnel will apply.

How Understanding Your Sales Funnel Clinches Deals

The sales funnel consists of seven steps. Each of these must be completely effectively. If it isn’t, your prospect walks away, and you lose the sale. By understanding the sales funnel, you place yourself in a position where you can analyze how your company handles each phase. You’ll be able to spot the areas where you lose customers’ interest most often, allowing you to strategize your selling to eliminate the sticking point.

A situation in which absolutely every client contact ends in a sale would indeed be rare, but you can certainly boost your conversion rate and your bottom line by optimizing the way in which your personnel completes the funnel.

Optimizing your Sales Funnel Saves You Money

Let’s face it: selling is an expensive process, and the longer it takes for your prospective clients to reach a decision, the more it will cost you in man hours. And for every customer who walks away without buying, there’s a definite cost to your business.

In addition, getting through the sales funnel effectively the first time requires the most effort. Once you have converted a prospective client into a client, the next purchase will be much easier. A well-optimized sales funnel will not only make you more money, but it will also save you the expense of ineffective selling.

What does the sales funnel consist of?

Every sale consists of seven steps:

If you want to grow your sales, (and who doesn’t?) you want every one of those steps to tick over nicely. How do you do that?

  1. Prospecting

This seems to be one of the most difficult areas of the sales funnel. You can waste a lot of resources by prospecting in a market that isn’t interested in what you do. To begin optimizing your prospecting, identify the type of person who buys your product or service. Now ask yourself: “How can I reach these people? Where will I find them?”

  1. Initial contact

Whether initial contact comes through your business’ marketing communication or the prospect approaches you, this phase is the vital “first impressions count” part of the sales process. What do customers want at this time?

Meet with your sales team and brainstorm the kind of help, support, and information that they will offer.

  1. Needs Identification

No amount of help, support or information will close a sale if you haven’t identified your client’s pain points and provided a solution. What do they really need, and how can your sales team confirm this? Selling isn’t just about talking. It’s also about questioning and listening to the client’s responses. What questions should your sales representatives be asking? What responses should they be listening for?

  1. Present the Offer

Now that your salesperson knows what the client needs, he or she can present an offer. This offer must fulfill the needs that have been identified, and it must be a better solution than that provided by possible alternatives.

Heavily scripted sales pitches often fail simply because they don’t take the information gathered up till now into account. A smart sales person will link the offer to the needs identified in the previous step. It’s also a good time to raise alternatives and explain why the solution you’re offering is the best fit for your client.

  1. Manage objections

When presented with an offer, your client may raise objections. Perhaps the price is higher than expected. Perhaps the time-frame involved is too lengthy for their liking. Your sales team must be equipped to listen carefully to client arguments and present reasonable and persuasive counter-arguments.

Just because you’re managing objections at this point doesn’t mean that you should simply override customer concerns. In this step of the process, good people skills are needed. Your client must feel that you’ve given their objections due consideration.

  1. Close the sale

There are many techniques for closing sales. Again, heavily scripted phrases may not work on the client who is currently in front of your sales person. This area is complex enough to warrant an article on its own, but here are a few ideas:

  1. Repeat Sales and Referrals

This step is the one that many businesses omit. The cost of doing so could be much higher than you realize. Just because your client has signed on the bottom line doesn’t necessarily mean that he or she is already a happy camper.

Follow-up calls to determine whether clients are satisfied and to offer help if they aren’t entirely happy will give your company a good reputation for its service. When clients feel that you care, even after they’ve paid you, they’re far more likely to give you repeat business or refer their friends.


Understanding and evaluating the sales funnel as it applies to your business is a great way to grow your sales. Your customers also benefit. In a best-case scenario, they get great service that keeps them coming back for more – and they become your best marketers, telling friends and family about your business when an opportunity to do so arises. There’s nothing better than a happy customer, and by optimizing your sales funnel, you get just that – plus better sales for your business.

Selling is a business process, and even though there will be variations based on customer needs, Tallyfy is the best way to track and evaluate workflows. Get your sales people using the right systems today with our handy tools.

Image source: Mediamodifier 

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