How a Day of Skiing Nearly Cost Me $78,000

May 18, 2016

It was 6:30 p.m. on a Sunday evening and my wife and I found ourselves sitting in a cubicle. Just a few hours before, we had been skiing, and now we were seriously contemplating a $78,000 purchase for a fractional ownership of a condo we could use for just one week per year. We had been drawn into a devious consumer trap known as a sales funnel.

The sales funnel concept is a ubiquitous process leveraged by expert-level marketing and sales teams to find and convert the maximum number of prospects. When paired with the right tactics, the sales funnel is a highly effective tool. The journey through the funnel may take just a few minutes or as long as months. Even the most conscientious consumers may find it difficult to escape once they are sucked in. The sales funnel can take many forms, but the following is a basic description of what almost all consumers experience when they make a purchase—planned or otherwise.

sales funnel The sales funnel

Phase 1: Attraction
An effective sales funnel begins by using promotions to generate awareness and attract prospects. Promotions can be subtle and are targeted to appeal to a specific audience. Coupons, sales, grand opening events, two-for-one deals, and a host of other activities are all designed to make you aware of the product in question.

To give you an idea of just how clever these promotions can be, the promotion in our situation was two-tiered. The company selling condos to skiers conveniently set up a brightly colored prize wheel right next to the free water station. My daughter is a sucker for prize wheels filled with trinkets that cost the promotion company pennies. While we were standing there watching the wheel spin around and around, a friendly booth worker nonchalantly asked my wife and me a couple of probing questions. Before the wheel had even stopped spinning, we had been offered a $125 gift card and a slew of other “gifts” if we would be willing to sit through a short presentation about the new development properties being offered.

It was easy to think, “Hey we’re smart and know we’d never be interested in one of these properties. It’s free money!” And so, based on the same desire for free stuff my daughter had ten seconds earlier for a chap stick, we willfully went deeper down the funnel.

Phase 2: Nurturing
During the nurturing stage, the sales team, which often consists of an assistant, sales person, sales lead, finance, and possibly a digital specialist, has confirmed that the prospect is the right target and begins to nurture the sale. Through different methods, the team collects information about the consumer’s spending habits, income, desires, timelines, and various  other data. Using this information, the team aligns a product with the prospect’s needs to generate a tangible interest. Everything from prices to features are designed to be flexible enough so there will always be a combination that works for the target audience.

Maybe it was the full day of skiing or the happy hour beer, but we screwed up big in this stage. A sales assistant handed us an iPad with a lengthy survey. We gave the sales team everything they needed to present us with the exact condo package in which we were mostly likely to be interested. They knew what add-ons to dangle, how to present an advantageous financial case, which layouts to show, and what warm emotional images to plug into the conversation. Our sales representative spun a vivid story about the joy of slope-side vacationing and the creation of precious family memories. I have to admit, I had a warm fuzzy feeling as our representative stoked my interests.

Phase 3: Evaluation
During this stage, the sales team has made their case and the prospect now evaluates the deal. If the sales team has done their job well, the evaluation is a no brainer. The sales person will leave for a few moments to allow the prospects to discuss, a sales associate will let you admire a pair of pants in a mirror, or a website will prominently display links to reviews, specs, and FAQs.

Two hallmarks of a purpose built sales funnel are a well laid-out case (“This is an easy decision!”) and an attempt to shorten the evaluation period for prospects (“Act now and receive a free paring knife!”). If monthly payments and discounts are pre-calculated and displayed, you’re in a funnel.

I wish I could claim that we were all kinds of savvy during this stage and we somehow woke up and saw the light. Instead, we found ourselves looking at a very reasonable monthly payment and imagining ourselves living in the lap of luxury (albeit for just one week a year). Step-by-step, the fantasy of mountain property ownership that had seemed out of reach just two hours earlier had become a tantalizing possibility.

Phase 4: Commitment
In the final phase, prospects become customers. They’ve verbally committed, draped those pants over their arm, or clicked the “add to cart” button. Escape from the funnel is nearly impossible now. Even as our rational brains are sending out doubts, our irrational brain is counteracting with emotional bonds to the product and the social stigma of backing out of a deal.

The last hurdle for the sales force is collecting payment. Ease of payment is a sure sign that you’ve gone through a meticulously designed funnel (Amazon’s one click purchase option is the pinnacle of frictionless payment). For those purchases that can’t be paid for easily, look for a contract for payment to be produced as fast as possible. Customers might have the right of rescission, but once they commit, they have a hard time going back on their word.

While the payment process for this random property we were considering was fairly straightforward and easy, we got lucky. The sales team had missed a crucial part in our consumer profile. We are investors first, lifestyle buyers second. Fractional ownership is all about buying a lifestyle that is close to worthless in a resale market. Once all those numbers were placed in front of us, we started plugging in the value of alternative investment options. After that, it was all downhill for the sales representative, and we walked away with our money safely in our wallets.

Final Thoughts
Sales funnels in and of themselves are not necessarily bad things. Matching buyers with the right products is a good thing. Yet, as consumers, we have to be thoughtful about exactly what is happening when we buy something. We need to realize that that the seller’s goal is to make as much money as possible with the most possible customers. Next time you’re buying something, take a minute to stop and evaluate exactly how you ended up with the items in your cart.

Is there something in there that you weren’t planning on buying before you received an email, saw the amount saved by buying more, or had a sales person push a few of your internal buttons?