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Author Vadim
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What is a sales funnel and why do you need it?

Knowledge about a sales funnel will help entrepreneurs to multiply their profits. No matter if it is built in e-Commerce or in offline sales, the model works in both cases.


Any novice businessman engaged in the sales or services should be well knowledgeable in the terminology and theory of marketing.There is one of the key concepts that all entrepreneurs must learn for a successful business; this is a "sales funnel".

How to understand the term “sales funnel”?

Sales funnel is the path that the average consumer of the goods or services passes from getting his attention to a proposal, to the moment of purchase.

It is important to consider the fact that not always a potential buyer who shows interest in the product or service, purchases it. The transaction provides the passage of a series of stages, each of which there is a sifting of the customers.

The funnel concept that describes the psychology of the client, was proposed by the American lawyer, Elias Lewis in 1898.
Three decades later this concept was successfully combined with another well-known concept of trade – AIDA: Attention, Interest, Desire, Action.

This means that before the completion of the transaction there are 4 stages of readiness the client:

  1. Firstly, you must capture the attention of the client, for example, through advertising tools.
  2. This causes the interest to the content of advertising appeals.
  3. Then comes a desire to take advantage of the offer.
  4. The customer is acting - he calls in the company, comes into the store or website.

There is already "hot" potential buyer, then remains left to take him “warm” and close the deal.

The sales funnel must be set, and this should be the second action after setting up the directories and before the appearance of the first customer. It should be tailored to the specific business and meet his goals. Sometimes happens that sales funnel in companies is growing to an unimaginable number of stages and eventually, you will get corrupted data. It's better to create several important phases based on the core of the business logic.

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For making management decisions it is important to perform all stages of the sales funnel for understanding the values, goals and basic parameters of clients with whom you managed to close a deal. Thus, the simple baseline report in the environment of the functional and data turns your system into a powerful tool for managing customers and identify reasons for their departure.

The inclusion of the sales funnel in your system allows you to define the following key points:

  • At what stages of the sales, there is the greatest outflow of potential customers
  • On which groups of consumer audience should focus firstly
  • What will be the value of conversion in combining the different parameters
  • Which processes in the chain of sales are unnecessary
  • What is the overall efficiency of the business

Salesforce conducted research and found that the sales funnel in businesses used by 57% companies and their main goal is to assess the solvency of customers. However, it is silly, after all, sales funnel helps to identify the most critical problems losses of the greater part of the leads and potential customers.

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