What is a Sales Funnel?
The definition of sales funnel is the process designed by a company to lead a prospect toward a completed sale. A sales funnel has multiple steps or stages that a prospect moves through. As the shape of a funnel implies, a larger number of prospects will reach the top of the funnel, with fewer reaching the middle of the funnel, and fewer yet reaching the bottom of the funnel.
Sales Funnel Stages
While the specific steps in a sales funnel will vary, typically the funnel moves a prospect through 4-key stages: awareness, interest and evaluation, decision, action.
Awareness is the stage in which a prospect first becomes aware that your solution exists via an ad, website, download or whitepaper. The prospect enters the funnel by opting in, initiating contact or beginning due diligence.
Interest and evaluation is the stage in which a prospect is qualified for interest in the solution and subsequently educated about the product through demos and consultations, a free trial, or other marketing materials.
The decision stage is where the terms of the deal are evaluated and negotiated, and where the solution may be weighed against competing solutions a prospect has interest in.
Action is the stage in which a prospect becomes a customer by making a purchase.
A sales funnel can continue past the action stage, especially when upsells, cross-sells, and repeat purchases are available.