What Is A Sales Funnel And How To Create One?

Your business has more customers flowing in, finding quality products, and leaving the shop/website as happy customers, willing to visit again at the next opportunity. It looks like your sales funnel strategy turned out to be a productive one. There is more cash rolling in and more satisfied customers billing out!

Consistent sales, high-profit margins, and increased consumer demands are factors that determine if a business is thriving and has the most exclusive marketing funnel put into place. However, 40% of marketers have no idea who their prospective buyer is and create marketing funnels that are totally ineffective.

If you don’t want to belong to those 40%, learning and grasping the sales funnel basics will give your business a more optimistic head start. So, let’s get to know all the ins and outs of the sales funnel starting from funnel meaning.

What Is A Sales Funnel?

As buyers, we all feel attracted to a product we see in an advertisement, conduct a little research or try the product in person, and finally buy it because it fulfills our requirements. Unknowingly we become a part of the sales funnel model created by a company to gain more positive leads.

In simple words, a sales funnel or revenue funnel is a marketing strategy that represents the activity of potential customers right from the start of their buying journey to their final decision of whether to buy the product.

A lot of things go into making a marketing funnel a success. These include effective advertisement, engaging website, appealing prospective buyers, meeting their demands and needs, and encouraging them to move to the final stage of the funnel.

Importance Of An Effective Sales Funnel

Demanding success without visualizing the needs of your customers will only inhibit your business growth and you will not be able to build sales. According to a survey, about 68% of companies never measure a sales funnel, whereas a whopping 79% of marketing leads never reach the final stage of the funnel. So, you don’t just need a marketing funnel; you need a good one because:

  • Your sales growth improves.
  • It allows you to develop a better marketing campaign.
  • It enables you to develop better communication with customers.
  • Understands your shortcomings.
  • Better comprehend the demands of potential buyers.

4 Stages Of A Sales Funnel

An effective sales funnel starts with 4 key stages, which begin when your prospect hears about your product, evaluates your offer, conducts market research about the product, and finalizes the decision based on what you offer all along this journey. 

Referred often as AIDA, the stages involve the following elements.

1.  Awareness (top of the funnel)

The first stage is making your prospects aware of your business. It can be through referral, an advertisement or marketing campaign on social media, blogs, or a DIY video containing a backlink to your website, anything that could move your prospects to the next stage.

2. Interest

The prospect has learned about your product or service. Now, the information and content you share on your site must be directed towards triggering the interest of your prospective buyers. Instead of pushing customers to make purchases, highlight the product features and benefits to help customers get to the decision-making process.

3. Decision

If the consumer has reached this stage, it means they are interested in purchasing your product or service. At this point, you must have compelling offers such as discounts, coupons, or free shipping for your customers. An irresistible offer can urge the potential buyer to reach the end of the funnel.

4. Action

The prospect finally made the purchase and became a customer. Now, you must have strategies for customer retention such as friendly customer support, signup for the newsletter, anything to keep them up to date about your brand.

How To Build An Effective Sales Funnel?


In Dotcom Secrets, Russell Branson talks about 4 types of funnels in the value ladder: Front-end funnels, Unboxing funnels, Presentation funnels, and Back-end Phone funnels.

With every stage engraved in your mind, it’s time to look at the necessary steps for creating an effective sales funnel that promotes your business and ensures more buyers reach the end of the funnel.

1. Customer Data And Market Analysis

Every business has a specific market audience that it needs to impress and attract. Here data gives you a better and deeper insight into the demands of the consumers and the market situation.

  • What are your current biggest challenges?
  • What are the consumers’ demands?
  • Where does your product lack?
  • How can you make it better?
  • Where competitors’ products lack?
  • At what stage does your lead leave the funnel?
  • Are your sales team’s ideas making any effect?

Knowing your target market, you can get answers to these questions and create a funnel strategy accordingly. Moving forward, when you are fully equipped with the knowledge about your potential leads and market, it will turn the tables in your favor.

2. Build A Landing Page

The ads, the “sign up” pop-up, or download the “e-book Now” will take your audience to the landing page of your website. Therefore,

  • Introduce the product with quality content that clearly describes the product, its features, benefits, and uses.
  • Optimize the content with SEO.
  •  Place a few CTAs, but strategically, don’t fill the page with these.
  • Design a landing page containing a form that requires the prospect to provide an email address so that you can keep in touch with them and bring them into your company’s ecosystem.

Remember, you have to offer something valuable, something that solves people’s problems or is an upgrade to the already available products in the market.

3. Increase Your Lead Generation To Generate Traffic

At this stage, you need to present your product/service and content in front of the target audience using promising tools. Apart from publishing and upgrading the content on your site, which includes informative blogs, infographics, video tutorials, you need to utilize advanced marketing tools such as:

  • Paid ads
  • Affiliate marketing.
  • Social media marketing
  • Implementing SEO techniques.

You need a mix of ads, offers, and content to build sales because 73% of consumers feel frustrated when websites offer useless ads and promotions instead of quality content to keep them engaged.

Related Content: 20 Lead Magnet ideas to increase subscribers

4. Email Campaign

Your customer has shown interest by providing you with their email address. Now, it’s up to you how you keep them and the techniques you imply for converting leads into customers. Send out occasional emails with quality content, send special offers, share an overview of your product through a survey, and so on.

According to a survey, nurtured leads create 48% larger purchases than non-nurtured leads.

Related Content: 7 Email marketing tips for small businesses

5. Finalize The Deal & Keep The Cycle Going

Finally, after days of nurturing the lead, you were able to get the customer to reach the decision phase of the funnel. An offer such as a special discount voucher, a free trial, or after-sales customer support can lead to the decision phase faster.

If they have swipe the card to make the purchase, you need a strategy to retain them, such as updating them about sales, educating them more about your services, and so on.

If they decided to drop the idea of buying, evaluate at which step the prospect exited the sales funnel, what were shortcomings, and where the gap lies between you and your target audience. It will help you revise the strategy and come back with a stronger and better one.

There you go, now you know what makes good sales funnel and how you can effectively create one.

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