Marketing Funnel vs. Sales Funnel

A Marketing funnel advertises a product or service to give leads (potential customers) a reason to buy. Whereas, the Sales funnel deals with the leads (from the marketing funnel), enticing them to buy, not once, but as often as possible. These funnels sometimes overlap each other at specific stages.

Basically, your marketing funnel is made up of several stages through which potential customers (prospects or leads) move from first “brand awareness” to “first-time buyer of product”. It’s the process of converting a visitor or browser into a paying customer.

It’s like pouring rice through a funnel: a lot goes into the top but only a trickle comes out the bottom. That’s how leads pour into a funnel: a lot of interested people go into it, but a much smaller number of people come out the other end — actually buying your product.

Some marketers have moved away from the term “marketing funnel” because they think it’s too simplistic to describe the complexities of lead nurturing by when a customer first hears/sees your brand to eventually converting into an actual paying customer. I personally still find it a useful way to visualize a customer journey from start to finish.

What is a marketing funnel?

A marketing funnel is a way of breaking down the customer journey all the way from the “awareness” stage (when they first learn about your business) to the “purchase” stage (when they’re ready to buy your product or service).

First, you want to attract awareness to your business by ranking high in search, giving away free ebooks, posting on social media, uploading videos on YouTube, etc. As leads progress through your funnel, your outreach methods will get more and more personalized or tailored to the customers needs (sometimes involving a product demo or a phone call) until the sale takes place.

Let’s define this idea further by looking at two examples:

Example 1

Sarah owns a software company with 10 salespeople and 1 product. She’s not a very savvy marketer, so her sales process currently involves handing her co-workers sales team a list of leads that she purchased online and having them “dial for dollars.” Her salespeople frequently get frustrated since her leads aren’t always good quality. Because her sales team are usually calling on people who A) aren’t interested in the company’s services and B) are not a good fit for the potential customers.

The sales team close less than 1% of the prospects they initially reach out to.

Example 2

Erin has a similar software company but only 3 sales people, but instead of taking Sarah’s traditional outbound marketing approach, she’s created a marketing funnel that helps her three salespeople close more sales with less effort.

Erin started by building a series of attention-grabbing content marketing pieces that are tied to landing pages on her website. Potential customers can engage with her content (blog posts, infographics, videos) and learn about her company and its services without a cold call from a salesperson.

When these potential buyers become interested enough in her products, they request an online demonstration by filling out the form on her landing pages. These requests are routed directly to her sales team, who, because they’re dealing with warmer leads, close roughly 50% of the customers to whom they demo. Erin’s company closes more sales than Sarah’s, with fewer salespeople and zero time spent on cold calling.

Obviously, these are extremely simplified examples, and most businesses will fall somewhere in the middle of these two scenarios.

Even if you’ve never heard the term “marketing funnel” before, make no mistake about it: you have one.