What Is a Sales Funnel?
Sales Funnels: The Ultimate Guide
Learning the ropes as a new salesperson is almost like learning a new language. While selling lemonade on your block can give you insight into how sales works, there are strategic approaches that can make your sales even more successful. One of the most tried-and-true approaches is the sales funnel.
What Is a Sales Funnel?
When you picture a funnel, you’re likely thinking of an object that is wider at the top and narrower at the bottom.
You can think of a large container as all potential customers, the funnel as your sales process, and the smaller container as your list of fully-realized customers. The sales funnel is a visual representation of the journey your clients go through — from awareness to research to making a decision. The more you understand the sales funnel, the better you can help your clients — the better your sales will be.
Why Are Sales Funnels Important?
Utilizing this model provides an organized approach to sales, with each step acting as a mini conversion that can be optimized to increase conversions. With this method, you can discover weak spots in your sales methods, test out possible improvements, and better assist your customers.
Your customers won’t know they’re moving through a sales funnel — they’re just shopping. If we think about the journey from the customer’s perspective, we can easily discover ways to make the process as easy and as fun as possible. The simpler the decision-making is for them, the more likely they are to become a client.
Whether you are building a sales funnel for real estate, children’s toys, clothes, or even B2B sales, there are three main parts to a sales funnel — the top, the middle, and the bottom. Each has its own nuances and implications, and requires a different level of engagement from you, the seller. Here’s an overview of what each section implies, with a more detailed look at the stages below:
Sales Funnel Lifecycle
Top - “I’m just looking”
This is the stage where your prospects are trying to learn more about their problem. In a brick-and-mortar store, this is where a customer is just browsing. This awareness and discovery stage is where good marketing shines, so you can leverage your more “hands-off” ad campaigns.
Middle - “Can you tell me more about ——?”
This critical stage of the funnel is where your target customers and sales-qualified leads (SQLs) are researching specific solutions to the problem they’ve identified. Here, you can help educate, nurture, and persuade to move your prospects further down the sales funnel. When a prospective customer is at this stage, you know there’s a real opportunity to make a sale. This is where it’s vital for your sales and marketing tactics to align!
Bottom - “I’m ready to buy...”
At this stage, your prospect is ready to make an educated decision about a purchase — and where you’ll make your all-important closing argument. The bottom of the funnel is where sales can shine and your opportunity to close the deal, and gain referrals by delivering a positive experience. It’s where relationship building and well-timed follow-ups with your buyers can keep you top of mind.
Sales Funnel Stages
Let’s dive into the sales funnel stages and further examine how you can leverage each one to bring the most value to your potential buyers. It’s up to you how you want to visualize your personal sales funnel — after all, it’s your tool! Our example below featuring four stages is a great starting point.
As the widest part of the sales funnel, anyone can be a potential customer. Of course, only those who are truly interested will continue the customer journey. So, what kinds of tactics can you employ for a successful awareness campaign?
The better the content you put out, the more likely people are to remember who you are.
Social media marketing
Use a variety of platforms to reach your target audience easily and often. InMails and LinkedIn Posts on LinkedIn are a great way to spread awareness.
Search engines, like Google, allow advertisers to show ads on their search engine results pages (SERPs), a very effective way to drive traffic to your site.
Offer pop-up shops, user conferences, or mixers to provide a personal touch that potential customers are sure to remember.
Magazines, billboards, and newspapers — traditional ads aren’t out of fashion just yet. They can be the perfect way to generate awareness for your brand.
Once you know your prospects are interested, you can start providing them with more specialized content that caters to their specific needs. This is where you’ll engage the most with your potential buyers and help ensure they have all the information they need to make an educated decision. Sharpen your persuasion skills and you’re off to the races!
Informational phone calls
This is one of the most effective ways to inform customers of your value proposition. Whether you use this as a personalized sales pitch opportunity or as an open door for questions, this can work wonders.
Let’s say you run an e-commerce site, and a portion of folks in your sales funnel added items to their cart… but never checked out. You can send an email to the potential customer reminding them they still have items in their cart. This technique is known as remarketing or retargeting.
You know the old writing advice, “show, don’t tell?” That applies here, too. You could regale potential customers all day with stories about how your blender can blend anything, or you could show them. (And trust us, especially in this example, showing them is much more fun).
Gather data and testimonials from other clients’ success stories to demonstrate to your prospects where you and your product or service stand apart — and work!
This refers to any content that’s placed behind a lead capture form. For example, after a visitor takes a quiz on your website, they’ll need to enter their email address to view the results.
When the buyer is ready to make a decision, these tactics can help entice them to take the proverbial plunge and go with your product or service. This may require some effort on your part, and/or some additional offers for further incentive.
Let customers see with their own eyes why your product or service is the ideal solution to their problem through real-life visuals and demonstrations.
Who doesn’t enjoy a free trial? Allowing prospects to test your product or service for a set amount of time can help them make a more informed decision. It’s like testing a car before purchasing, or signing up for a trial of a streaming service before subscribing.
Offering a discount on a first order is an excellent way to encourage a prospect to become your newest customer.
The more information you can give a potential buyer, the more likely they are to feel comfortable and confident going forward with you.
Some sales funnels may stop here, or they’ll combine the “decision” and “customer success” phases. Neither one is inherently better, but depending on the type of product or service you offer, it may be beneficial to think of them as their own separate stages.
At this stage, your buyer has made a decision. Whether that ends up being in your favor or not, there are additional steps you can take as the seller to nurture the relationship and keep your business top of mind.
For example, if you’re focusing on customer retention, invite your client to reach out with feedback. Send a satisfaction survey, or make yourself available for tech support, follow-up questions, and more.
If your prospect decided to not go with your product or service, it’s always worthwhile to ask why. Customer feedback is essential to finding any opportunities for improvement in your business, and to help optimize your own sales process. The more you iterate on your personal process and those of your sales team, the more likely you are to reach the right customers and find success in sales.
Create a social media campaign to get prospects to visit your website
Share something of value in exchange for a lead
Prospects are informed to make a purchase via content shared
4. Customer Success:
Offer an enticing deal to boost retention
Retail Sales Funnel Example
Imagine that you run a business selling premium coffee subscriptions. Each month, you send your customers locally grown coffee beans from all over the world. After doing some initial market research, you’ve found that your primary audience frequents Instagram and TikTok, and that your target customers are all genders ranging from ages 20–45.
Armed with this information, you run an excellent Instagram ad and create a great TikTok video that both lead potential customers to a landing page. This page prompts them to sign up for an email list in exchange for something like free samples or an e-newsletter. Now, you have a list of leads.
Over the next few weeks, you send out content to educate your potential customers about your subscription service, share easy-to-make coffee recipes, and send quizzes that tell them which roasts to try based on their taste preferences.
After this initial email blitz, you offer a 15 percent off coupon for the first three months of a subscription service — and voila! You’re selling subscriptions left and right.
Next, you create a new email list with those same customers and begin the whole process again. Only now, you’re sending different content. Maybe you give out a free bag of coffee for every three referrals you get from your customers. Or you offer deals on special merchandise such as mugs, or cold brew pitchers to returning customers. Perhaps you create a punch card that when filled out earns the customer three months for free.
B2B Sales Funnel Example
Let’s say you work in technology services and consulting. Your clients are typically large organizations with 10,000+ employees. Based on your research, you know that your customers are mid-senior level professionals of all genders and are very active on LinkedIn.
Knowing this, you launch an ad on LinkedIn as well as a post to drive engagement, all leading to a landing page that’ll inform visitors of your services. You then use InMail through LinkedIn Sales Navigator to connect with leads and turn them into prospects.
Now with a fresh list of potential customers, you spend the next chunk of time educating them on your services. Let them know what type of consulting you offer, and use Sales Navigator to filter audience segments to target the appropriate people.
As with the above example, consider offering a discount or some type of deal for first-time users of your services.
Work Smarter, Not Harder
As with many tools, the sales funnel model offers endless possibilities for you and your business. Whether you’re using it as a strategic method to garner as many sales as possible, or simply as a visualization of the customer journey, the sales funnel is the perfect place to start.
While the specifics may vary, the basic structure is always the same. With even a modest marketing effort at the top, you can help your business immensely by creating marketing materials and efforts that work for you, making the selling part even easier.
Bottom line: When you understand what a sales funnel is and how it works, you can learn to optimize it. The better you understand your audience and their needs, the more sales you can close, and the more successful you will be.