What Is a Sales Funnel and How to Make One

The world of digital marketing is constantly evolving, and what worked a few years ago may not be what works today. But there’s one tool that has stood the test of time and continues to help businesses grow—the sales funnel. It’s used by large corporations, small businesses and entrepreneurs, no matter their industry or the product or service they offer. 

If you sell anything online, you need to implement a sales funnel as part of your marketing strategy. It’s what’s going to help you discover and connect with your ideal customers, close sales and set your business up for long-term success. 

What Is a Sales Funnel

A sales funnel is a model that represents your customers’ journey from discovering your offer to making a purchase. For example, at the top of the funnel, you may have 1000 people who saw your Facebook ad; 300 of them were interested enough to follow your social media account; 50 subscribed to your emails; and at the bottom of the funnel are the 10 who actually bought your product.

It’s natural for prospects to drop off as they make their way down the funnel, but this is not a bad thing. It just means you can focus your efforts on the prospects who have shown real interest in your offer, rather than spending all your resources on people who have no intention of ever buying anything from you.  

Stages of a Sales Funnel

Sales funnels can look very different from one company to the next—the number of stages and the type of engagement associated with each stage depend on the industry the company is in, what they’re selling, their target audience and their marketing strategy. 

However, at their core, most sales funnels are variations of the model below. You can use it as a starting point and adjust it to your needs by adding or removing stages. 

Stage 1: Awareness

People in this stage of the sales funnel have had one or two interactions with your company. They’re aware of your existence, but they don’t know much about your offerings and haven’t yet made any plans to make a purchase. 

Stage 2: Interest

After becoming aware of your company, some people may be interested in learning more. They may check out your website or follow you on social media. At this point, they’ve become prospective customers—they might buy from you in the future, but they’re keeping other options in mind, as well. 

Stage 3: Decision

After learning more about your company and your products or services, some people might start to seriously consider making a purchase. They compare your offer to those of your competitors, reach out to you with questions or maybe even look for promotional codes to help sway their decision in your favor. 

Stage 4: Action

Finally, after deliberating and comparing options, some people from the previous stage ultimately decide to make a purchase and go through with the transaction. 

Benefits of a Sales Funnel

Implementing a sales funnel as part of your marketing strategy can help you:

1. Spend time and resources more efficiently

You can put a lot of money and effort into a massive marketing campaign, hoping to make as many sales as possible. But you’d probably be paying to reach people who have zero interest in buying from you. Instead, a sales funnel can help you categorize your prospective customers into groups and create a targeted approach for each of them. This way, you can spend more of your resources on people who are actually ready to receive your sales message and consider making a purchase. 

2. Create timely and relevant touchpoints with prospects 

Your prospects have varying levels of interest in your product or service, and a single marketing message won’t work for all of them. Using a sales funnel allows you to customize your communications and make sure you send the right people the right message at the right time. 

When this is done well, it can encourage the most promising prospects to move down to the next stage in the funnel and filter out the rest. 

3.Track and optimize conversions at every stage

If you only have one point at which a prospect becomes a customer, it can be hard to understand why some people convert and others don’t. With a sales funnel, on the other hand, each stage is its own mini-conversion. This means you can track how many people move from one stage to the next, what exactly you’re doing to help these mini-conversion rates and where you can do better. 

4. Collect data and make more accurate sales projections 

After using a sales funnel for some time, you’ll have insight into the average percentage of prospects that make it from the top of the funnel to the bottom. This can be very helpful in projecting sales, planning your marketing budget and setting up awareness campaigns. For example, if your average overall conversion rate is 1% and you’d like to make 10 sales, then you know you need to run an ad to bring at least 1000 new people into the awareness stage of your sales funnel. 

How To Build an Effective Sales Funnel

A typical sales funnel involves attracting prospective customers, giving away an enticing offer in exchange for their email address and nurturing them through an email drip campaign until they are ready to make a purchase. Yours doesn’t have to look exactly like this, but it’s a great place to start. 

Step 1: Identify Your Target Audience

Who is your ideal customer? What are their interests, values and pain points? The answers to these questions will help you deliver messaging that resonates with your target audience and attracts people who are most likely to become customers. 

Step 2: Captivate Their Attention

Next, you need to give your target audience a way to find out about you. You can do this organically through content marketing—think TikTok videos and blog posts—or through paid advertising. As they become aware of your brand and what you’re selling, they’ll enter the first stage of your sales funnel.  

Step 3: Give Away Something of Value

At this point, your goal is to identify people who are ready to move to the next stage and engage them further. One of the best ways to do this is by offering them something valuable—for example, a template, report, video or live webinar—in exchange for their email address. A custom landing page will make it easy for them to sign up or download the offer, while allowing you to collect data and track conversions. 

Step 4: Nurture Prospects With Emails

Now that you have their email addresses, you can send your prospects a series of messages to engage them even further. Keep the emails informative—tell them more about your company, your product or service and what problems it can solve. Most importantly, don’t push people to make a purchase. The aim here is to engage, not sell. 

Step 5: Offer a Special Deal

After several meaningful touchpoints, the right prospects will be ready to take action. You can give them a gentle push and create a sense of urgency by offering a special, limited-time promotion.

Step 6: Follow-up and Maintain Relationships

Even though you’ve now closed sales and reached the last stage of your sales funnel, the work doesn’t end here. After some time, you can circle back to prospects who dropped off in the previous stages and re-engage them. 

It’s also important to regularly follow up with customers who did ultimately make a purchase. It’s an opportunity to deepen your relationship with them, build brand loyalty and increase the likelihood that they’ll come back and buy from you again in the future. 

Step 7: Keep Refining the Funnel 

Analyze your funnel’s performance on a regular basis and see where you can make improvements. Take note of what works well and results in high conversion rates at each stage of the funnel. More importantly, identify and fix gaps in the funnel or places where you notice a lot of people dropping off. 

Mastering the Art of Sales Funnels

You won’t find instructions for building the perfect sales funnel for your business—it has to be custom-made to fit your unique offer and target audience. You can, however, learn to recognize opportunities to engage your prospects, provide value and communicate with them in an authentic way. 
Creating a sales funnel that works takes time and experimentation, but it’s absolutely worth it in the long run. You’ll know you’ve done it right when you stop feeling like you need to convince people to buy from you and instead, start to effortlessly attract your ideal customers and make sales.

Written By

Sayana Lam

Sayana is a musician, writer and graphic designer based in Toronto, Canada.

Share

• 
• 
• 
•