A sales funnel, in German Sales funnel, describes the individual stages that potential customers go through, from first becoming aware of an offer right through to making a purchase.
The funnel model illustrates that, at the outset, a large number of prospective customers are reached, but only a proportion of them go on to make a purchase. Companies can use the sales funnel to tailor their marketing and sales efforts to each specific stage.
A typical sales funnel consists of the following stages:
| Phase | Meaning |
| Awareness | Potential customers become aware of the company or its offering for the first time. |
| Interest | Prospective customers take a closer look at the product or service. |
| Consideration | The offer is compared with alternatives and assessed. |
| Decision | Potential customers develop a specific intention to buy. |
| Action | The purchase or conclusion of the contract takes place. |
Depending on the business model, further stages may be added, such as customer loyalty, repeat purchases or word-of-mouth recommendations.
Typical activities along the sales funnel include:
- Social media posts and advertising to raise awareness
- Blog posts, webinars or white papers for information purposes
- Product demonstrations and free trial versions
- personal advice from sales staff
- specific offers and contract negotiations
- Onboarding and after-sales support
For start-ups, a structured sales funnel can help by:
- to gain a better understanding of the customer journey
- Aligning marketing and sales
- Identifying weaknesses in the sales process
- Making sales processes more predictable
- Improving conversion rates
- to optimise the use of time and budget
Key metrics for a sales funnel are:
- Number of prospective customers reached
- Number of leads generated
- Conversion rate between the individual stages
- average time taken to complete
- Customer acquisition costs
- average order value
- Number of new customers acquired
A common mistake is to focus solely on the number of new leads. It is also crucial to consider how many prospective customers actually move on to the next stage and at what point they drop out of the process.
innoWerft helps start-up founders to define target audiences and sales channels, structure customer acquisition processes and develop appropriate strategies for each stage of the sales funnel.