By the end of this guide, you'll have a better understanding of some of the basic truths about sales funnels, including:
- How sales funnels fit into the marketing and sales processes
- Why these funnels are so critical to business success
- What elements are part of the process for creating a funnel
- How to build and optimize a strong sales funnel that contributes to success
What is a Sales Funnel?
A sales funnel is a method through which potential customers are funneled through your sales pipeline until they convert into a paying customer or client. It involves a variety of steps to nurture leads until they make a purchase.
Common Stages of the Funnel
While there are many different ways to define a sales funnel, most depictions include similar characteristics and stages. In fact, many traditional sales funnel models include the following steps, which are standard for most businesses:
- Awareness: the point at which a buyer first learns about a new brand or service
- Interest: the stage of engagement, where buyers engage with content or do research
- Decision: the customer has answers to important questions and intends to buy soon
- Action: the point of a closed deal with a sales team member or a completed purchase
Occasionally, you might hear the sales funnel process described with the acronym AIDA. This is simply an easy way to remember what each stage of the standard sales funnel means. Remember, for every action that an individual customer takes throughout the funnel, there is usually a reciprocal or automated action that occurs within the business itself.
Why are Sales Funnels Important?
A sales funnel is important because it establishes the foundation for how leads become customers. Think of it as a visual example of physically walking alongside a new prospect, learning more about their needs and pain points, then offering a solution that helps them fix a frustration. When prospects can visualize how a business and product meets their needs specifically, there’s a greater probability that they will eventually purchase.
Sales funnels are also essential because they can facilitate a better order to your marketing and sales messages. If a prospect is just beginning to research options to solve their problem, you don’t want to oversell with aggressive tactics and strong language. These mistakes could have the opposite effect and turn away prospects who might otherwise have a need for your offer.
Sales Funnels Explained
As you consider the question, “What is a sales funnel?”, visualize what this looks like in real life. For instance, if you own a donut shop, imagine the day that a new customer walks by and sees your enticing storefront and signage.
Intrigued, the potential customer steps inside to investigate, and there an employee provides them with a free sample. After spending several minutes looking over the menu and bakery case, the shop visitor requests a dozen donuts and pays with their credit card. In a short time, they’ve gone through each stage of the sales funnel, from awareness to action.
This process also happens every single day in the world of digital marketing. Customers learn about new brands or services, research on websites, interact with content or team members, and decide to take action through a purchase. In the section below, we’ll provide more detail about the individual elements of the sales funnel process.
Elements of an Effective Sales Funnel
As mentioned above, there are four widely recognized stages of the sales funnel: awareness, interest, decision, and action. At some point, you ( or your marketing team) have a responsibility and play a role in moving customers through each stage.
Many times, businesses are focused on what happens once a customer is in the funnel. But remember, a customer has to become aware first before they can ever interact in a meaningful way. Although this is one of the primary responsibilities of a good marketing team, customers gain awareness in a number of ways, including:
- Organic Google search results
- Targeted ads on search results pages or social media
- A shared post by a friend of acquaintance
- Word of mouth recommendation
Simply put, building awareness is the point at which you successfully hook or capture a customer’s attention in a positive way.
If you weren’t able to capture personal data about a lead in the awareness stage (with a contact form or landing page, for instance), then the interest stage is where an exchange of information must take place. At this point, the customer is researching, engaging with content, and trying to learn more.
Your efforts at this stage should focus on value - help the potential customer without being overly pushy or confrontational. Respect the consideration process, and connect the prospect to relevant resources that might assist them in making a future decision.
The decision stage could be one of the longest parts of the process, since many customers are cautious about making significant buying choices. The bigger the sale, the more time that it can take for a customer to exit this phase and enter the next. There are a few things that you can do to alleviate stress in the decision step:
- Provide case studies or testimonials from other real clients and customers
- Use retargeting ads effectively in order to stay top-of-mind
- Follow up via email with special offers or incentives, tailored specifically to them
- Deliver plenty of authentic value and support, no matter which way they’re leaning
The final stage of the sales funnel is the point of action; this is when a new prospect converts into a paying customer. At this point, the customer officially becomes a part of your community.
Now that the customer has made a purchase or signed a contract, how can you work to retain them? Although the action stage is characterized by a completed sale, the customer’s experience is still vital. How can you nurture existing customers, solve any issues, and turn them into raving fans?
How to Build a Sales Funnel from Start to Finish
The stages of a sales funnel are relatively simple in theory. To construct a successful sales funnel, however, you need good strategy and company buy-in. Sales and marketing efforts should align on the following tips to gain the most traction.
- Research your audience and market. Good research should be the backbone of your sales funnel definition. You should have an in-depth understanding of the product or service you offer and why it provides unique value. Additionally, research any competing offers and build messaging around why your solution stands out.
- Define your target persona. A target persona is an avatar of your ideal customer. Defining this piece of the puzzle allows you to craft detailed messaging and content that hits home with the people you’re most likely to reach.
- Drive engagement through inbound marketing strategies. Incorporate unique inbound strategies including content production, email marketing, social media usage, and SEO/SEM. Begin to test out your marketing plan by establishing key performance indicators (KPIs) and taking a close look at your prospect goals.
- Define your company’s conversion process. Once a prospect enters the funnel, how do you plan to convert them? Who on the team is responsible for initiating conversations or fielding questions? The relationship between marketing and sales can crush or strengthen your efforts, so it’s crucial to establish expectations from the start.
How to Optimize Your Sales Funnel
Once you’ve defined your sales funnel process, you can implement and test as needed. Trial and error is normal, so don’t be afraid to make adjustments or pivot entirely. Below are a few ideas to help you optimize and take your goals to the next level.
- Publish helpful and educational content. Create more blog posts and downloadable assets that establish your business as a thought leader. This means that you will have recognizable authority, which can strengthen your reputation and visibility.
- Maintain a social media presence. Social media is a powerful tool that you can’t afford to ignore. Leverage it to learn more about your target audience, to engage in social listening, and to respond in innovative ways to customer comments or concerns.
- Use well-designed landing pages to capture lead data. As you build awareness, be sure that new prospects have somewhere to go where they can share contact information. User-friendly landing pages with simple web forms and powerful CTAs can increase conversion rates substantially.
- Incorporate nurturing and drip campaigns. Since email is such a powerful tool in your marketing arsenal, use it to stay in touch with timely messages and helpful suggestions. You can even use these campaigns to send one-time incentives or special deals, which may be enough to move a prospect through to the next funnel stage.
As trends evolve, solopreneurs (or sales and marketing teams) must also adapt by staying on top of best practices and responding to ever-changing customer behaviors. Despite how purchase practices change, the bottom line is this–businesses and customers alike will always benefit from an optimized, user-friendly experience for discovery and buying.
The more aware you are of the customer lifecycle, and the better you can adapt in ways that attract new customers, the more successful your business will be.
To better understand how to leverage your digital marketing efforts, check out our resources page. You’ll find our top recommended sales funnel software and other resources you can start using in your business today.
Disclosure: I am an independent ClickFunnels Affiliate, not an employee. I receive referral payments from ClickFunnels. The opinions expressed here are my own and are not official statements of ClickFunnels or its parent company, Etison LLC. View full Disclosure here.