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What Is A Sales Funnel?

Posted by Gary Henderson on Jan 19, 2021 1:45:00 PM

In the digital marketing industry, the sales funnel is one of the core concepts which can take your business from the unknown to a multi-million-dollar marketing machine. 

If you want to take your business from zero to hero in no time, you must learn what a sales funnel is and how it works. 

Did you know some marketers have built a career around implementing this single marketing concept?

Simultaneously, many entrepreneurs, coaches, influencers, and even marketers find it hard to wrap their heads around this concept. 

So, we decided to develop a comprehensive blog post, explaining the sales funnel, its importance, and how it works. We also added ways you can create and optimize your marketing funnel to make the maximum impact for your business. 

Once I was talking to one of my clients when the idea of sales funnels came up. I just said something about a sales funnel, and the clients looked at me as though she heard the term for the first time. 

She asked hesitantly, “what’s a sales funnel”? 

You know it’s common for entrepreneurs, influencers, and coaches to have a similar reaction. When I heard the term for the first time, it sounded strange to me too. 

Let’s explore the sales funnel in great detail and see how this marketing concept can help you achieve your business goals.

What Is A Sales Funnel?

Just imagine a real-world funnel. We pour in some substance at the top of the funnel, which filters down towards one point.

In marketing, something similar happens. At the top of your sales funnel, for example, there are people who come across your business. 

Unlike real funnel, not all of them who enter the funnel filter down to the other end -- most of them will leave the funnel without buying your products or services. 

shutterstock_553139383

When you optimize your sales funnel correctly, more people will complete your sales funnel from start to finish because your funnel serves your target audience in the way they need to be served.

Let me try to define the term as simply as possible.

A sales funnel represents the customer journey your potential clients or customers go through, starting from “what the heck is this business” to “I am ready to buy/sign up”. 

It’s obvious that there are going to be certain steps along the way from initial discovery to final purchase. 

These steps are commonly known as the top, middle, and bottom of the funnel. But these steps can be different depending on your sales model.  But we can say a sales funnel represents the steps someone has to take to become a customer. 

The goal is to create a successful sales funnel that will generate the best results for your business.

Here is a very simple example of a sales funnel.

Let’s say you run a brick-and-mortar business. The people at the top of your sales funnel are those who walk by your store.

Now, some of them would walk in. That’s the next step in your funnel. A certain percentage of people who entered your store see some products on clearance.

Now, they’ve moved to the next step in the funnel. One of them selects a product and decides to buy it. Now they’re at the bottom of the funnel. 

Why Is Creating a Sales Funnel Important? 

As a business owner, you’re supposed to be in charge of the bigger picture. It’s your job to develop and manage the overall business strategy from product development to sales and marketing. 

You may often find yourself in a state of mind where plenty of unique business ideas come to your mind, and you feel highly motivated to get a jump start with your stunning ideas. 

A great idea or short-lived motivation sessions aren’t enough to make real progress. You must understand the tricks of the trade to succeed. 

The sales funnel is one of those tricks that could boost your growth in a very systematic way. 

Don't sales drive business growth?

You may have developed a top-notch coaching program, but there’s no way you can grow your business or even survive if you can’t sell it. To thrive, you have to constantly adapt and pay attention to the ever-changing business environment and your customers’ needs.

To drive sales, businesses rely on a sales funnel that illustrates the path prospects take.

Here are three reasons creating a sales funnel is crucial for your business growth: 

1. Systematically Generates New Leads + Build Relationships

 

Leads

I have seen many business owners who rely entirely on hope marketing. Not sure what hope marketing is all about? It means waiting around for word of mouth or talking to random people in hopes that business will come their way. 

They never ask anyone to take action or to pay them.

In the end, they fail miserably because they don’t have a well-thought-out plan to drive leads and build relationships with the right people. 

A sales funnel could help you generate new leads in a cost and time-efficient way.

When you build a sales funnel, you know who’s going to be at the top, in the middle, and at the bottom, and you would be able to deliver the right message considering the position of a prospect in the funnel. 

This whole process is a way of generating leads and building long-lasting relationships with your audience. 

2. Turns Cold Leads Into Paying Customers

Sales funnels are a proven strategy to turn cold leads into a warm audience and paying customers. 

Why is it so effective? Because it gives your sales team valuable insights into your prospects’ thought processes, problems, challenges, and decisions. 

Do you know why 79% of marketing leads are never converted into paying customers?

It’s mainly because businesses don’t have a system that could tell them what their prospects are thinking at each stage of the purchasing journey. 

3. Helps Deliver The Right Message At The Right Rime

R3MAT

We used an example of a brick-and-mortar business at the start of the post. Remember? 

Now, you can’t create a single message for everyone in your audience. Let’s say you have two prospects. The one has just visited your website and interacted with your content, and the other has contacted you to seek more information about your business. 

Do you think you should be delivering the same message to both of them? 

I don’t think so. 

If you need help understanding how to talk to your ideal target audience make sure to download our customer avatar worksheet to meet all of the needs of your ideal customer.

 

FREE Download!

CUSTOMER AVATAR WORKSHEET

Download this FREE worksheet that will help you identify the perfect customer avatar for your business.

 

A sales funnel helps you deliver the right message to the right people and at the right moment. Top performing sales rep target prospects’ needs at a particular stage and then deliver the message accordingly. 

To further understand this concept, let’s move to understand how a sales funnel really works. 

How A Sales Funnel Works

While each business has its own way of managing sales and customer touchpoints, I would like to structure a sales funnel into four different stages: awareness, interest, decision, and purchase/action. 

 

What is the buyers journey

 

We know a sales funnel, like a real funnel, is widest at the top and the narrowest at the bottom. It’s because you keep losing prospects as they move from one stage to another.

Each funnel pushes qualified leads into the next stage and removes those that aren’t a good fit for your products or services. 

Let’s discuss the stages of a sales funnel to understand how sales funnel works: 

Stage 1: Discovery/Awareness Phase

In the awareness stage, your ideal customer may realize they are going through a problem.

But they’re still struggling to identify their challenge. This person could have many questions about their problem and how your business can solve it. At this point, they need to seek resources that could educate them about the problem. 

This is where having additional content will come in handy. You want to have content about your products or services that your potential client can find on the web or on social media.

If you’re a life coach, your prospects at this stage might be asking this question: what is the purpose and direction of my life?

Or, if you sell mattresses, your prospects at the awareness stage might be asking: why do I wake up with lower back pain? 

So, at the top of the funnel, your audience needs information so they can articulate their problems and ask the right questions. 

Your job at this point should be to create content that educates them on their challenges or problems. That’s the way you convert untouched prospects into leads and move them one step down the funnel. 

Stage 2: Interest Phase

At this stage, your prospects understand their problem and know something about your business, but they want to learn more.

However, they’re not yet ready to buy or sign up for your products. They’re still looking for possible solutions. 

People usually take into account all available solutions to solve their problems.

For example, they’re sure that they need to do something to fix their back pains, but they’re not quite sure whether or not your mattresses are the right product to buy. 

In other words, they’re looking for types of solutions rather than evaluating solution providers. 

This is where you need content that tells how your mattress can help them get rid of back pain and why they should buy them. 

Stage 3: Decision Phase

This is where your potential clients are ready to buy. They might be considering you as well as your competitors. Now your potential customers are at the bottom of the funnel knowing everything about their problem and potential solutions. 

And, most importantly, they’re ready to select the business to buy the solution. Their questions at this stage are vendor-driven. This is when you should be making your best offers.

Small factors like free shipping, a bonus product, or a discount can set your offers apart from your competitors. 

Whatever you offer, make it so attractive that your website visitors or audience will rush to become your customers. 

Stage 4: Action Phase

At the very bottom of the sales funnel, people take action. They buy your products or services and you finally convert a cold lead into a customer through a well-defined process. At this stage, you should be thinking about turning one purchase into five or ten. 

If they decide not to do business with you, your efforts can still produce results. Create nurture campaigns to stay top of mind. 

Also, make sure to create some remarketing audiences and lookalike audiences to get back in front of your ideal customers one last time.

You can further engage with your customers and encourage them to leave feedback. You can have another stage in your sales funnel that deals with customer retention. 

Your story doesn’t end once someone buys your products. A customer can be turned into a repeat customer and brand advocates. 

To keep your customers happy, you have to help them thoroughly with all aspects of their problem.

Let’s see what content you should be creating to talk to prospects in different stages of the funnel. 

How To Create Content For Each Stage Of The Funnel

One of the common mistakes people make is that they don’t realize the importance of aligning their message with their sales funnel stages.

As they fail to deliver the right message, their prospects don’t progress through the funnel. 

 

Marketing campaign sales funnel example

 

So, it’s important to align your messaging to fit the context. No matter what type of content you want to produce, it should take people from one stage to the next. 

I recommend you to create the type of content you’re good at. If you enjoy making videos for your business, feel free to use them throughout the sales funnel. 

Let me explain how you can use different content for each stage of your sales funnel to improve conversion. 

1. Top Of Funnel 

At the top of your sales funnel, hardly anyone knows who you are or what your business is all about. Maybe your friends or family and a few customers know about your business, but most of your audience don’t. 

So, your content should be answering their questions and providing them with insights and opinions to educate them. This is where you have the opportunity to create a buzz around your brand or products. 

What type of content do you think would be ideal to educate your audience about their problems and your solutions? 

Let me mention this again: you can easily go from bland to brand if you create the right message and deliver it to the right people.

Here are some ideal content types for the awareness stage: 

+ Blogging 

When it comes to creating awareness and interest around your products or brand, nothing can beat blogging. 

Your blog readers could be the biggest source of website traffic. So, use blogging to create brand awareness. Don’t forget to use the right keywords to attract the right audience from organic channels. 

Identify your prospects’ problems and pains and create blog posts around them. Or write on topics your audience wants to discover. Make sure to promote your blogs on different platforms. 

But blogging isn't the only platform to nurture people in the awareness stage. 

+ Social Media Posts 

Your social media efforts can play a key role at this point.

An increasing number of people turn to social media to seek information on all sorts of subjects from customer reviews to branded content. 

When creating social media content, be sure to make things as easy for your audience as possible. Short-from take-aways, videos, and snackable content perform really well on social media.

+ How-To Videos  

I believe this one is probably the best technique to inform people about a problem and then offer a step-by-step solution. 

Need an example? 

Check out the video series by Moz where they break down SEO principles to their audience and converter complex information into easy-to-understand language. 

Video can be used in almost all the stages of a sales funnel from awareness to action. And when it comes to delivering your message through video, YouTube is an ideal platform.

Be sure to optimize your content for your targeted keywords to reach the right audience. 

Besides, feel free to use videos within your website content and blog posts. 

If you want to create content for the initial stages in the funnel, create explainer videos to educate your audience as well as create an interest in your products or services.

At the same time, a good video can entice people to take the final action. 

+ Webinars 

⭐Related Post: How To Make Money With Webinars

This type of content allows you to deliver information through video or live video streaming. 

You can go live on different social media platforms like Facebook or YouTube to disseminate information to your prospects. 

If you check out some of the leading marketing brands, you’ll see them focusing heavily on webinars and podcasts to create brand awareness.  

2. Middle Of Funnel 

In the middle of the funnel (interest and decision stages), your prospects are likely to research the best solutions for them.

Let’s take a look at content types that work great in the middle of the sales funnel: 

+ Case Studies 

Like blogging, case studies work great in both the awareness stage and the interest stage. Showing your prospects the results you’ve achieved for your existing clients can create dramatic results. 

A good case study provides quantitative data and detailed information on how you help a customer solve a problem. 

I personally believe that showing your success stories to your prospective customers is a great way to generate their interest in your products.

For example, if you’re a marketer, feel free to show how you help a business 10x their website traffic or double their Facebook following in a short period of time. 

+ Product Comparisons

People used to see product comparisons in consideration or the interest stage. They like to look at both sides: the pros and cons of a solution. 

So, it might be a good idea to compare your products or services to that of your competitors to demonstrate how your solutions are better. 

+ Lead Magnets 

It’s a good idea to use lead magnets to generate interest in your business. You grow your email list by offering something valuable to your audiences such as an ebook or free initial consultation. 

3. Bottom Of Funnel 

At the bottom of the funnel, people figure out what they should do to buy a product.

Your sales funnel may look different depending on your business model, audience, product, or pricing. For instance, B2B businesses have to put a lot of efforts in the middle of the funnel because their prospects require far more nurturing and relationship development. 

Let me tell you why. 

B2B customers spend more time when it comes to making purchase decisions - It’s easier to sell a $40 pair of shoes than a $1,000 business coaching program. 

 

Sales funnel example

 

So, here is what you need to publish to perform well at the bottom of the funnel: 

+ Free Trial 

Let’s say your prospects want to buy a mattress from you but they don’t know what type of mattress would be ideal for them.

To make things easier, you offer a free mattress trial to help your customers make the right decision. Or, you produce guides to help people choose the right mattress. 

Car dealers use the “test drive” tactic to help people make decisions quickly. Offer something similar to your prospective customers so that they get a feel of your products. 

+ Consultation Offer

You’re about to close the sale. All you have to do at this point is to offer a little motivation in the form of a free consultation, a demo, or anything. We see many leading coaching companies offer free initial consultation offers. 

Every audience has its own process for awareness and evaluation. Before you create any type of content, learn as much about the audience as possible. 

Just remember one thing, the content you create should meet the person where they are in the stages of the funnel. It should be used as a way to nurture and move the relationship further in the funnel. 

Note: Running Facebook ads and remarketing is also an effective way to nurture everybody in your sales funnel. 

An example of a Sales Funnel 

A few weeks ago, I wrote a blog post about building a perfect Facebook audience. In which I talked about ad sequencing and how we can tailor our ad message to target all stages in a sales funnel. 

The first ad creates awareness. The second one targets those who interact with your first ad.

In other words, the second ad targets prospects that are in the interest stage. The final ad is shown to those who moved from the interest stage to the decision stage. 

Since you’ve got a picture of sales funnel stages in your mind now, we can go ahead and look at a sales funnel example: 

Imagine that you’re an executive coach that focuses on workplace wellbeing, and your target audience is individual lawyers and law firms. You know your prospective clients use Facebook a lot. 

You create a landing page and then run an awesome Facebook ad to drive traffic to it. You ask your visitors to sign up for your email list in exchange for a free guide or anything. Now, you’ve turned landing page visitors into leads. 

You can see your prospective clients moving through the funnel.

After a few days, send out some valuable resources to educate your email subscribers about mindfulness, leadership, and resilience. You tell them how certain practices can dramatically improve their professional wellbeing. 

Finally, you send them some attractive offers; for example, 20% off on the first coaching session or anything that fits the business model. 

Here we go! You’re selling your coaching services like never before. 

Don’t stop there! Keep engaging your customers. Tell them how some of your services can further boost their career growth. 

That’s how you start a campaign and guide your audience from awareness to action with the help of a strategic Facebook ad campaign. 

How to Build a Sales Funnel for Your Business

Now you’re ready to build a sales funnel for your business. Follow these steps to get it done fast: 

1. Create A Landing Page

It would be a great idea to build a landing page and use your content marketing efforts to drive traffic to that page.

At this stage, you should be focusing on capturing leads rather than pushing people to buy your products. 

A landing page should be used as a vehicle to take your audience from the first stage to the next in the sales pipeline.

Therefore, it should have a clear call-to-action telling your audience what they should do next. 

2. Create Buyer Personas 

Who are your ideal customers? Don’t rely on guesswork or assumptions to answer this question. Instead, use data and research to create buyer personas for your business. 

If you need help identifying exactly who your ideal customer is then make sure to download our customer avatar worksheet. 

 

FREE Download!

CUSTOMER AVATAR WORKSHEET

Download this FREE worksheet that will help you identify the perfect customer avatar for your business.

 

3. Offer Value

Why should people listen to you or do whatever you want them to do?

When building a sales funnel for your business, you have to come up with some incentives or discounts to create FOMO.

You’ve to give them a reason why they should be going from one stage to another. 

4. Nurture

You put a lot of effort to generate leads. What you decide to do with those leads is even more crucial.

At every stage of the funnel, you need to nurture your prospects. And for this, you need relevant content. 

5. Call-To-Action/Upsell

Define a crystal clear call-to-action for every stage in the sales funnel.

Make sure to upsell after your customers have made the purchase. 

6. Stay Top Of Mind  

Whatever your end goal is, you want to make sure to nurture relationships whether they successfully complete the funnel or not.

This works on your customer retention and helps you stay top of mind with them for a longer period of time. 

⭐Related Post: What Is Mindshare? How To Stay Top Of Mind With Important People

How To Optimize Your Sales Funnel 

You probably know the pain of missing a sale. Don’t you?

After weeks of content creation and pitches, the prospect drops out of the sales funnel. I can tell it hurts. 

It happens when your sales management team doesn't build or optimize a sales funnel. If your sales funnels aren’t producing any sales, it’s time to evaluate them and find the holes.

Irrelevant messaging, forgotten follow-ups, missed appointments, and sticky notes are some of the holes that can be easily fixed. 

The following marketing strategy will help you optimize your sales funnel: 

Use the #R3MAT Method to deliver the right message at the right stage in the sales funnel

 

R3MAT

When people move through your sales funnel, their needs change. For example, at the awareness stage, they need the information that explains their problem. In the next step, they need a different set of information. 

The #R3MAT Method helps you deliver the right message at the right stage in the sales funnel. 

Use a CRM 

If you want to streamline your sales and marketing processes, use a CRM like HubSpot to be a powerhouse for your sales funnels.

The HubSpot Growth Platform’s tools make it super easy to build and maintain an efficient sales process that delivers results. 

Use Social Proof In Your Sales Funnels And Marketing

⭐Related Post: How To Become An Expert In Social Proof Marketing

Social proof increases the conversion rate. Period! 

So, why should you be reluctant to use it in your sales funnels and other marketing efforts? Social proof from your existing customers, credible experts in your industry, or family can be of great help. 

Identify Any Cracks In Your Funnel 

When something doesn’t work try something else. Or, try to identify cracks in your current sales funnel. 

Do some split testing and see what type of content your audience resonates with the best! If you find you get better success with a particular word, phrase or video then use more of that language in your content.

Watch Relevant Data 

Most importantly, track your performance.

First, you should set realistic goals and then measure your performance against those goals. Watching relevant analytics allows you to manage relationships between you and your leads more effectively.

A robust CRM would enable you to manage and track your sales efforts more efficiently. 

Final Thoughts 

A sales funnel is a journey. A prospect discovers your business, learns more about it, decides which product they should buy, and finally makes a purchase. 

As a business owner, your job is to clearly define that journey and prepare a game plan to move people from one stage to another.