In the business world, you’ll hear the word “funnel” more than you ever have in your life. This is because funnels are important, as they provide the foundation for guiding the user from a prospect to a conversion or customer.
However, it gets a little more complicated than throwing a lead in the top and watching them plop out of the bottom and handing you money. There have to be touchpoints, micro-conversions, and divisions made in the funnel to help make the process more effective and frictionless.
To add a little more confusion into the mix, there are two essential funnels that reign supreme in any business: The sales funnel and the marketing funnel. Each has its unique touchpoints, micro-conversions, and divisions, as they each have a different (but similar) goal.
I know what you’re thinking, but don’t panic. As complicated as it can be, my goal here today is to untangle the web of confusion that you might have forming in your head. Once visualized, you’ll see some unique distinctions, and you’ll be able to point each one out at the drop of a hat.
Further reading: Understanding the Difference Between Sales and Marketing
What is a marketing funnel?
A marketing funnel is designed to guide users throughout their journey with a business. From the time they first hear mention of the business to when they make a purchase, the marketing funnel captures every step they make.
As a fundamental function of any company, marketing is designed to help prospects understand and get familiar with that company. This helps provide some sales support in the future when they finally decide to convert and make a purchase.
The marketing funnel is made up of three crucial areas. At its core, those three components can be described as building awareness, keeping the interest of potential customers, and evaluating leads before they are handed off to sales.
The key processes for each of these stages in marketing terms are demand generation, lead generation, and lead nurturing.
1. Demand generation
Demand generation is building awareness for your product or service by using various marketing strategies and campaigns. Those campaigns can include inbound marketing, email marketing, content, ads, and more. It’s at the very top of the marketing funnel.
2. Lead generation
Lead generation is the process of gathering leads. At this stage, you collect the contact information of potential leads.
What’s important at this phase is to get prospects and leads more familiar with your brand through detailed copy and content. You can create landing pages, website copy, lead magnets, and other messaging to help the lead get on board with your product.
3. Lead nurturing
Lead nurturing comes after the prospect has shown some interest in the product by providing their contact details.
This is where keeping them interested and on track comes into play. You have to nurture them to guide them to the end of the funnel. Here, building a relationship between the lead and your brand is of the utmost importance.
How is this done? Through personalization and tailor-made content — resources, case studies, email messages, etc.
To feel nurtured, the lead has to feel that they are unique and not just another number. Leads want to feel that connection. Would you prefer to buy a product from a big warehouse or someone you know?
Most of us choose the path of familiarity. Business is no different. They want to be familiar with you. It builds trust, and that’s why it’s vital for sales.
At this stage, marketing also qualifies leads based on their closeness to your ICP (ideal customer profile) and their sales-readiness. MQLs (marketing qualified leads) are then handed off to sales.
What is a sales funnel?
A sales funnel is a system that’s been designed to take a lead from the marketing portion of their journey to the final conversion. While the marketing funnel is designed to attract potential leads and transition them into customers quickly, the sales funnel takes marketing-qualified leads from the marketing stage to conversion.
In the sales funnel, awareness is already established. The goal is to get the lead to see your uniqueness and what makes you better than your competition in an effort to make a conversion. Once committed, they are pushed to the final stages, where they will be converted. This could mean a full purchase or a free trial.
What’s unique about the sales funnel over the marketing funnel is that the sales funnel doesn’t end here. The next and final stage is retention. You want that customer to stay and purchase more in the future. This is highly beneficial for three main reasons:
- Sales boost – According to Small Business Trends, recurring customers spend 33% more than new customers.
- They help identify problems – New customers are less likely to point out issues because they aren’t as familiar with your brand, and they may not even be aware that it’s an issue.
- Sales automation – When a customer is already aware of your brand, what you sell, and the process that goes along with it, that saves you a lot of leg work. Retention is built-in automation, as it saves you time and money.
Further reading: How to Build Automated Sales Funnels in 9 Steps
What are the key differences between a sales funnel and a marketing funnel?
As you can see, these two funnels are different in some aspects and very similar in others. They both aim to bring a customer to conversion, but they go about it differently.
To fully understand the key differences between a sales funnel and a marketing funnel, you have to break it down according to the top, middle, and bottom of the funnel. So let’s talk about these three points in regards to the marketing funnel.
Marketing funnel stages
Top of the Funnel (TOFU)
At the top of the marketing funnel, you’ll find everyone who shares some interest in the business. The top of the funnel is wide because it aims to gather as many leads as possible. It has a wide range of criteria and is vague to an extent, but not all of these leads will convert. Most won’t even make it to the next stage.
The aim at the top of the marketing funnel is education. You want readers, viewers, prospects, and leads to understand your product or service as much as possible. You create this thin layer of brand awareness, which helps differentiate you from everyone else. This data will help build trust for the lead in the future, giving them the insight they need to either make a purchase or churn.
Here is where you’ll find blog posts related to broad topics, videos targeted at big audiences, and other related media forms. The data collected from said media will also be generic, but it is useful nonetheless.
This data will be used for more specific ads in the future, helping to further guide the lead on their way to the bottom of the funnel and conversion.
The article you are reading is an excellent example of TOFU content. It targets a fairly generic non-transactional topic. And while it will most likely not convert you into a paying customer of Encharge (or at least not right away), hopefully, it will be interesting enough for you to download one of the free resources to learn more about marketing and sales automation.
Middle of the Funnel (MOFU)
In the middle of the marketing funnel, leads are looking for evidence. What makes your brand so great? Why choose you over your competition? To do this, you have to attack the issues that the lead is trying to solve and provide a solution. One that is better for their needs over anyone else.
Here, leads will relate well with more technical content like case studies, whitepapers, eBooks, and webinars that revolve around solutions. This is all lead nurturing, and if done correctly, it will pay off in the next stage.
Here, the sales development representatives and other sales team members should be incredibly active in trying to find high-valued leads and take over communication.
Marketing funnel (BOFU)
Your previous nurturing efforts will hopefully pay off now that we’re at the bottom of the marketing funnel. Here, the messaging looks a little different. Instead of blog articles and social media posts, we’re talking about Demos, free trials, and actionable CTAs.
The customer will convert without intervention. They can sign up or check out through the website. For physical products, this is highly likely.
On the other hand, they could require further intervention and a little extra push from a sales representative.
For example, 75% of SaaS companies have salespeople contact Freemium leads. There is a reason. Assisted conversion rate is almost 4x that of self-serve conversion rate:
Either way, the marketing team now has the data to better map the buyer’s journey. This will help streamline the marketing and sales process in the future because they can work on their messaging and develop personas to cater to each audience specifically.
Sales funnel stages
Technically speaking, the sales funnel is a part of the marketing funnel. In many aspects, the sales team relies heavily on the marketing team to bring in the leads. The marketing team also relies heavily on the sales team to bring their hard work to fruition.
As companies transition to more meaningful revenue-focused goals, the borderline between sales and marketing becomes blurry.
In a sales funnel, the stages and qualifications to advance become a little more detailed and unique to the sales funnel. Instead of top, middle, and bottom, you can look at it as more of like a title for the lead. This will make more sense once we break it down. First, it starts with a marketing qualified lead.
Marketing qualified lead (MQL)
At the top of the sales funnel, you have a marketing-qualified lead (MQL). In order to be in this stage, they have to have shown some interest in conversion by filling out a form, downloading some sort of content, or doing something that gives the sales team their contact information.
By doing this, the sales and marketing teams know that they are interested in something that the company provides.
This shows how important SEO and proper keyword research are to the integrity of your marketing campaigns. If the content their downloading relates to your business, the lead is marketing qualified, meaning you will benefit from increasing your marketing efforts with them.
Sales accepted lead (SAL)
Once the MQL takes a few pre-determined actions, it’s time for the sales team to step in. The sales team has accepted the lead, as they have determined that they are a good fit for the product.
This is likely the shortest stage of any funnel because the idea is to move them as soon as possible to the next stage. There shouldn’t be any lingering or second-guessing. The longer the lead stays in this stage, the faster they will become uninterested. At a certain point, any move made by the sales team on a lead in this stage will be pretty much null and void.
For this reason, marketing and sales often share KPIs based on how fast the lead is acted upon. The idea is that action is taken immediately as soon as the lead lands in the sales pipeline.
It’s very important to note that if you have a lot of leads making it to this stage and they are being disqualified, then there is a major disconnect between sales and marketing. Since both teams rely so heavily on each other for the proper function of the business, this should be addressed immediately. At this point, most leads should be passed into the next stage as soon as humanly possible.
Further reading: 27 Ways to Align Your Sales and Marketing Teams
Sales qualified lead (SQL)
Now that the lead has made it to the end of the sales funnel, they are sales qualified. At this point, the sales team is on their own to develop the relationship between the business and the lead, and the final goal is to make that conversion happen.
Now it’s time for a sales representative to step in and build on the details. Since the lead shows heavy interest in making a purchase, the negotiations can begin. You need to figure out what kind of deal the lead is looking for, how urgent it is, their timeline expectation, and what product or service you provide can solve their problems.
Once all of this is ironed out, the lead commits and follows through with the sale or backs out. In a perfect world, this never happens, but it isn’t impossible and needs to be taken seriously.
If a lead makes it to the end of the funnel and churns quickly, then there is a problem somewhere. This could be with the qualification process, the messaging of your marketing and sales collateral, the value of your product, the price, or something else. This is why it is important to constantly adapt and evolve your marketing and sales funnels.
A good representation of how all of this plays out and what exactly makes both funnels different from each other can be seen in the following illustration.
As you can see, they are similar in some respect but overall different. A marketing funnel is designed to be a high-level strategy that takes customers from being completely unaware of your brand to loyal customers.
On the other side of things, a sales funnel is designed as a system where you make plans to get leads to take action. That action could be signing up for an email list, downloading an ebook, or getting contact information from them.
Much like the marketing funnel, the sales funnel is a series (system) of content, sites, or touchpoints designed to take a lead from the beginning to the end. When you draw it out like that, you can see that the sales funnel is actually part of the marketing funnel, which is why many people get confused.
How automation plays a role in both
Because of the nature of each funnel, you can see a distinct need to stay in contact with your leads throughout their journey.
Nurturing is part of the process no matter what route you decide to take them.
For that reason, email automation plays a huge role in both the sales and marketing funnel. Throughout the content above, you may have picked up on the sense of timing. Getting the right message to the right customer at the right time is the name of the game in both sales and marketing. People are quick to choose, and even just a minute could mean the difference between a sale and another lost lead.
But automation goes beyond email marketing. You can use a marketing automation tool like Encharge to automate your sales process.
Let’s say that the lead makes their way into the SAL stage of the sales funnel. It’s incredibly important that they don’t stay there for long. With automation, the sales team can make contact with them as soon as they hit that stage of the sales pipeline. No waiting around, increasing the potential for them to flop.
When you integrate Encharge with your CRM platform like HubSpot or Salesforce, you can automatically change the deal stage of leads when they perform a specific interaction (or a set of interactions).
In the marketing funnel, maybe they showed interest in the product you’re selling somewhere around the middle (MOFU). Remember that the funnel is still wide, and churn is highly possible. These leads have many options, and to make it to the next stage of the funnel, they need some content to better understand why you’re a contender. An automated email sent out as soon as they perform an action could be just the thing to advance them into the next stages of the funnel.
Why you need Encharge?
Encharge is the perfect marketing automation tool for anyone that wants to send timely emails and automate their sales process.. All of those things I mentioned before about email marketing and how it fits into both funnels? Well, Encharge provides a number of solutions to help aid both the marketing and sales teams.
Set triggers based on behavior and send out important, actionable emails as soon as a lead makes an action. Use the Flow Builder to create detailed user journeys and further understand, map, and design them by visually connecting the steps. Instill that extra level of trust with highly personalized emails designed for specific users. All of this and more is possible with Encharge.
Conclusions and takeaway
Speaking of journeys, what a journey we’ve been on today. Whether you were confused about the difference between sales funnels and marketing funnels before or not, one thing is clear: They each play their own distinct role while working towards the same goal — converting visitors to customers.
Sales funnel vs. marketing funnel is a rather complex topic that can truthfully be debated for hours. Depending on who you talk to, they might have a completely different definition or even general idea of what they are and how they defer. What’s important for you to remember is that although they don’t mirror each other exactly, their end result should be the same thing.
And for all your email marketing needs, feel free to book a demo with Encharge. See with your very own eyes how we’re changing the email marketing automation game and how your sales and marketing funnels can benefit in just a few easy clicks.