What is a Sales Funnel? And HOW TO Build One

Ever wondered about the journey your customers are going through before they end up making a purchase from your business? 

The journey — mapped by a sales funnel — outlines all the checkpoints at which your customers will interact with your brand before they are ready to make a purchase. In order to build a successful sales strategy, your sales funnel has to be top-notch. 

Your primary goal with your sales funnel is to move people from one stage to another until they are ready to purchase. 

I talk about everything sales funnel in this article — what is it, how to build one, and what kind of content you would require for each step of your funnel. 

What is a Sales Funnel?

A sales funnel is a marketing concept that maps out the journey a customer goes through when making any kind of purchase. The model uses a funnel as an analogy because a large number of potential customers may begin at the top end of the sales process. Still, only a fraction of these people actually end up making a purchase. There are multiple sales to a sales funnel, usually called as the top, middle, and bottom of the funnel, depending on a company’s sales model. 

As prospects pass through each stage of the funnel, they signify a more profound commitment to the purchase goal. Most businesses, whether online or conventional, use this model to guide their B2C marketing efforts in each stage of the sales funnel.

The four basic Sales Funnel stages are:

  • Awareness
  • Interest
  • Decision
  • Action

Before discussing these stages, let’s first discuss why we need a sales funnel. 

Need for a Sales Funnel 

If you are a business owner, you know the pain of missing out on sales. After putting out content, lead magnets, webinars, and so much more, prospects drop out of the funnel without purchasing anything. 

It happens. But it happens less if you have created a proper sales funnel. A sales funnel helps you understand your potential customers and what they are thinking, doing, and looking for at each stage of their journey. With these insights, you can invest in the right marketing activities and channels to create the most relevant and engaging messaging during each stage and turn more prospects into paying customers. 

Understanding the Sales Funnel Stages

From the first time your prospect hears about you until the moment he buys from you, he passes through different stages of your sales funnel. This journey might differ from one prospect to the next depending on your buying personas, your niche, and the types of products and services you sell.

Before you start building your sales funnel, it is essential for you to have a clear business vision, develop an eCommerce marketing strategy, and then define your target audience to work towards your business growth. If, for example, you are looking at how to create an online clothing store, you need to follow specific steps to develop your business and stay successful. You can add as many stages within your sales funnel as you want. In general, there are four stages of a sales funnel. 

Stages of a Sales Funnel 

As discussed above, the four main stages of a sales funnel are: 

  1. Awareness
  2. Interest
  3. Decision
  4. Action

Awareness

This is the first stage and is called the “awareness” stage because it’s where people first become aware of your solution, service, or product. They might also become aware of the problems that they need to solve and the possible ways to deal with them. This is when they hear about you for the first time, through an ad, Google search, a post shared on social media, word of mouth, or another traffic source.

One example of the awareness stage is when a prospect learns about your company for the first time. Perhaps they stumbled on one of your ads, read your blogs, found your website through Google search, or heard a colleague talking about your product or service. 

Interest

Once a prospect has learned about your brand, they will evaluate it based on the level of interest and the solutions you provide. 

At the “Interest” stage, the prospect is actively looking for solutions to their problems and ways to achieve their goals. They search for solutions on Google. They’ll think about the problem they’re trying to solve and conduct competitive research to make sure your offering is the best solution. 

Decision

Now that the prospect knows about your company and the solutions it provides for the prospect’s pain points, they will dig in deeper. The prospect will find information like pricing and packaging options. Sales pages, webinars, and calls are very helpful in this stage to help the prospects make a decision.

Action

The most important stage of the funnel — whether the prospect makes a purchase or not. If they don’t buy from you now, that doesn’t mean the deal is lost forever. You can create nurture campaigns to make sure you stay on top of their mind for any future needs.

Customer Retention — Important Part of Sales Funnel 

When you have your customer on board with your company, it is important that you do everything to retain them. This stage requires you to focus on keeping customers happy in order to convert them into repeat customers and brand advocates. Word of mouth is a powerful force, and no one can do it better than a happy customer.

To keep customers happy, you need to help your customers with all aspects and problems related to their pain points. Basically, you want them to stay engaged with your product/service. You can do that by sharing content such as:

  • Emails
  • Special Offers
  • Surveys/Outreach and follow-ups
  • Product usage guides
  • Customer Feedback Forms
  • Technical assistance literature

Examples of a Sales Funnel 

Let’s take a sales funnel example that you own an online book shop. You know that your target audience is mostly on Facebook; they are mostly males and females between the ages of 20 to 50. 

You build a landing page with a form for prospects to sign up with their emails in exchange for a lead magnet. In this case, the lead magnet is the first ten pages of a new novel that’s just launched. 

You run an ad on your Facebook page that drives traffic to your landing page. Prospects add their email addresses and download the lead magnet. Now you have leads instead of prospects. They are moving through the funnel.

What you will do now is nurture the leads. You can send out educational content related to books, or share the new books that will be coming soon to your book shop, or DIY tips to build a bookshelf. All these email drips will be focused on educating your audience. 


At the end of this drip campaign, you offer a 10% discount coupon on the first order to your entire list. Now you are selling your books like crazy, and your prospects are converting into customers. 

You continue sending educational content to your email list. Give them ideas for bookshelves, how to take care of their books, or suggest different books as gifts. With this content, you are asking them to come back for more. 

There you have it — a perfect sales funnel, leading prospects through the funnel and converting them into paying customers. 

To summarize, this sales funnel has four stages as follows: 

  • Awareness: You created a Facebook ad to lead people to your landing page.
  • Interest: You offer something of value in exchange for lead capture (email addresses).
  • Decision: Your content educates your audience and prepares them for a purchase.
  • Action: You offer a coupon your leads can’t resist, then begin marketing to them again to boost retention.

How to build a sales funnel for your business 

For a properly built sales funnel to exist, you first need potential customers who can move through that funnel. Once you have those prospects, you can track behavior and engagement using lead scoring to identify where they are in the funnel.

Let’s delve into the steps to help you create a sales funnel:

1. Gather Data and Understand Your Customers

The best way to understand your audience is by talking to them. The more data you gather about your audience, the more effective your sales funnel will become. 

One important thing to remember is — you aren’t marketing your business to everyone. You are marketing it to people who are a good fit for what you sell.  

That way, you can adjust your funnel to focus on those key and most relevant selling points. You may also gain insights that lead you to adjust your product or service and make it better.

The most important questions you should ask your customers are:

  • What are your current challenges with [the area that you cover]?
  • What are your current fears and frustrations? 
  • What are your goals and aspirations?
  • What have you done to try to solve your problems/achieve your goals? 
  • How well did it work?

Based on your data, you can create content for each stage of your sales funnel and help prospects move down your pipeline.

2. Capture Your Audience’s Attention

The only way your sales funnel works is if you can lure prospects into it. Without prospects and people interested in your business, there is no sales funnel. This means putting your content in front of your target audience.

First, you should take the organic route and post a lot of diverse content across all of your platforms. Branch out with different content forms like infographics, videos, social media content, and other types of content. Organic traffic includes: 

  • SEO
  • Social media traffic (non-paid)
  • Referral traffic (from other sites linking to you)
  • Direct traffic (from people who know about your brand and have visited your website before)

You can add forms and popups to your website to capture leads. You can also run a few ads or do prospecting manually. The ideal place to run such campaigns depends on where your target audience hangs out. If you’re selling B2B, LinkedIn prospecting or LinkedIn ads might be the perfect solution.

3. Build a landing page

Your ad and other content need to take your prospects somewhere. This is where a landing page with a cant-miss offer comes in. 

If they click on an ad, sign up for a webinar, or download an ebook, they’ll go to a landing page. 

Your landing page should communicate who you are as a company and your unique benefits.  Focus on capturing leads instead of pushing sales. This could be the one and only opportunity you have to impress your prospects and capture them. 

Make sure the landing page has a form for prospects to enter their information. You want to capture their email address so you can continue to communicate with them to steer them towards the next step. Your landing page should also have a bold CTA (call to action) that tells them exactly what to do, whether it is downloading a free eBook or reading a blog.

4. Create an Email Drip Campaign

Now that you have captured leads through the landing page, you need to communicate with them in order to close them. 

Market to your leads through email marketing by providing valuable and engaging content. Send updates regularly, but not too frequently. Maybe one or two emails per week should suffice. It totally depends on your audience and what you have to offer.

Start by educating your prospects first. Send them educational content rather than promotional content. Build up to the sales later. First answer questions like:  

  • What do they want to learn? 
  • What obstacles and objections do you need to overcome to convince them to buy?

At the end of your drip campaign, make an incredible offer they can’t resist. That’s the piece of content that will inspire your leads to act and make a purchase.

5. Keep the communication going 

Once your prospects convert into paying customers, you don’t forget about them. Continue to reach out to them. Keep sending them educational content that might be useful to them. Thank them for their purchase and send them regular updates on any promotions or sales. Involve them in your social media strategy and build a community out of your customers to develop brand trust and loyalty.

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