What Is A Sales Funnel?

A sales funnel is a framework that depicts the customer journey. This journey includes all of the steps that prospects or leads go through before deciding to purchase a product or not. It begins with the prospect learning about the company and the product or service that they offer.

Sales funnels help marketers visualize the customer journey and develop a marketing and sales strategy that will guide the prospect smoothly through the funnel to the end-point.

A sales funnel organizes the whole process into three stages: the top, middle, and bottom of the sales funnel. If you think of what a funnel looks like, you’ll note that the top of the funnel is the largest section and then it becomes narrower toward the bottom. This is exactly how a sales funnel works as well.

A larger number of people start at the top of the funnel and the number dwindles the further down the funnel you go. This is because while a large number of people may hear about your company, and maybe even sign up to your email list, fewer will be interested in taking the next action and making a purchase.

Because of this, your marketing tactics should focus more on the middle and bottom of the funnel prospects – as they are more likely to become customers. This does not mean you should neglect the top of the sales funnel as some people may not be interested in your offer now but could keep you in mind for their future needs.

Sales funnels will look different for every business because they are based on specific business models, but each stage of the funnel should have a similar goal of guiding the prospect to take the next step.

Let’s take a look at the three stages of the sales funnel:

A sales funnel is a framework that depicts the customer journey. This journey includes all of the steps that prospects or leads go through before deciding to purchase a product or not. It begins with the prospect learning about the company and the product or service that they offer.

Sales funnels help marketers visualize the customer journey and develop a marketing and sales strategy that will guide the prospect smoothly through the funnel to the end-point.

A sales funnel organizes the whole process into three stages: the top, middle, and bottom of the sales funnel. If you think of what a funnel looks like, you’ll note that the top of the funnel is the largest section and then it becomes narrower toward the bottom. This is exactly how a sales funnel works as well.

A larger number of people start at the top of the funnel and the number dwindles the further down the funnel you go. This is because while a large number of people may hear about your company, and maybe even sign up to your email list, fewer will be interested in taking the next action and making a purchase.

Because of this, your marketing tactics should focus more on the middle and bottom of the funnel prospects – as they are more likely to become customers. This does not mean you should neglect the top of the sales funnel as some people may not be interested in your offer now but could keep you in mind for their future needs.

Sales funnels will look different for every business because they are based on specific business models, but each stage of the funnel should have a similar goal of guiding the prospect to take the next step.

Let’s take a look at the three stages of the sales funnel:

Top Of Funnel (TOFU)

The top of the funnel is where people hear about your product, service or company, and they are made aware of your brand. This could happen through advertising efforts, word-of-mouth, seeing your product in a store or online, etc.

Then they visit your website for the first time to see what you’re about and learn a little more about your offering.

Most of the people in this stage of the funnel will leave it here as they just aren’t interested in making the purchase, or aren’t ready to.

Middle Of Funnel (MOFU)

The middle of the funnel is where you tell your prospects more about who you are, what you do, and what problems you have solutions for. This is where you connect with them and start to build your customer relationships.

Bottom Of Funnel (BOFU)

The bottom of the funnel is where you need to convince your prospects why your product or service is the best solution out there for their needs. This is the stage at which people are ready to make a purchase but need that final little push in the right direction.

Then the lead makes a purchase and becomes a paying customer.

This is not the only way to view an online sales funnel. Some people prefer to divide the funnel into four sections instead of three. These four sections represent where the prospect is in the buyer process. They include Awareness, Interest, Decision, and Action.

Both of these sales funnel perspectives aim to illustrate the same thing (the customer journey) and help marketers to gain an overall view of their marketing strategy and where they need to focus their efforts.

What Is The Purpose Of A Sales Funnel?

The purpose of a sales funnel is to improve the customer journey from start to finish. Sales funnels incorporate numerous stages and steps that guide a prospect through the funnel to get to the end-point, which is to buy your product and effectively convert from a lead to a customer.

Sales funnels are a visual depiction to help you get an overall view of your online marketing strategy, along with the entire process you go through to get a prospect to become a buyer.

How Do I Create An Online Sales Funnel?

Creating an online sales funnel is crucial for online businesses, but it can be difficult to know where to start. Here are a few key steps that all business owners should do to create a successful and effective online sales funnel.

Identify And Analyze Your Target Audience

Before you can do anything, you need to identify your target audience. These are the people who have a problem that you can provide a solution to with your product or service. Defining who your audience is allows you to create the right kind of content to catch their eye and pique their interest in your brand.

Get started with identifying your target audience is to ask questions about what they’re interested in, what their hobbies are, where they spend their time, and what they like to do, etc. Finding out the answers to these types of questions allows you to create relevant and valuable content that will drive them to your site.

You should also analyze their behavior and monitor what sort of links they click on and which pages they spend a long time on. This will give you a better idea of how to catch their attention with your content and keep them interested in learning more.

The more you know about your target audience, the better your marketing and sales strategy will be as you will know how to relate and appeal to them.

Capture Your Prospects’ Attention And Verify Interest

Not everyone who fits into your target audience’s description is going to be interested in your offer. So, the first thing to do here is to create a good landing page that will grab your visitors’ attention and spark their interest in your offer.

You can drive traffic to this page organically by generating relevant and valuable content that points back to the landing page, or you could pay for some advertising on various social media platforms – just make sure that your ads are running where your target audience hangs out. For example, if you’re targeting a young audience, advertising on LinkedIn probably isn’t your best bet.

Once you’ve got your audience’s attention and driven them to your well-designed landing page, you can weed out the people who will never purchase – leaving the more interested prospects in the funnel. 

This is where you generate quality leads. Your landing page should include a free or low-ticket offer that your audience wouldn’t want to miss out on. This could be something like a free eBook, demo, instructional video, online course, whitepaper, or a trial run of your service.

The point here is to get your prospect’s contact information, as well as give them something of value so that you can start to gain their trust and build your customer relationships.

Only the people who are actually interested in your offer or brand will choose to sign up and give you their information. This means you won’t waste any time or resources trying to sell your products to those who aren’t ever going to buy from you.

Use Strategic Marketing Tactics

Now is the time to implement a strategic marketing campaign that nurtures the relationships with your prospects by providing them with interesting content that is relevant to them. Email marketing is a tried and tested way of garnering trust and building solid relationships with your audience – as long as you do it right.

Spamming your audience with emails isn’t going to do anyone any good. So, it is essential that you plan your email marketing campaigns carefully and provide them with your best content to keep them interested and invested. Doing this, in addition to posting new content on your social profiles, you will gain a regular following of prospects to upsell.

At the end of your email campaign, once you’ve educated your leads on who exactly you are, what you offer and why it could benefit them, you can upsell them to your main product or service.

If you’re a business that sells a lot of products, it could be to try to convince them to buy another product from you.

Create Your Sales Funnel

Once you have all of these steps down, you can create an effective sales funnel using software tools and a sales funnel builder. This will help you to solidify all processes in your sales funnel to make sure you are implementing the most effective strategies.

This step includes creating a good landing page for your product with a landing page builder, setting up email marketing automation, tracking conversions, creating opt-in forms, segmenting your audience, A/B testing your pages, utilizing various plugins and themes, and more. With sales funnel software, you can manage and monitor all of these different processes from one central place so that you don’t miss anything.

If you’re just getting started with your online business, a sales funnel builder makes it easy to set up all your processes and email marketing automation so that you can start converting better in no time.

Lastly, you need to keep in touch with your customers even after they’ve purchased from you. Thanking them for their business and following up with discounts or coupon codes will help keep your brand in their minds and makes them more likely to purchase from you again in the future.

Membership- or loyalty-programs are an excellent way of keeping up with your customer base. By implementing one of these programs, you can let your customers in on the latest deals, offers, sales, and webinars as they happen so that they are encouraged to keep buying from you.

There should be some sort of reward or incentive to these programs so that they benefit the customers when they choose to purchase from your site instead of your competitors’.

Why Are Sales Funnels Important?

Sales funnels are important for your online business because they guide your prospects along the customer journey and through the whole buying process. This begins from the moment they first hear about your product through to conducting research, browsing your website and finally making the decision to purchase from you.

Without a sales funnel, you would see a massive drop in the number of conversions as many people will hear about your product and probably forget about it shortly after. Not only this, but sales funnels help you to relate better to your audience, maximize your lead generation, and show you where your marketing strategy needs improvement.

Sales Funnel Examples

While you may have familiarized yourself with the steps and the general idea of a sales funnel, you might still want to look at an example or two to see the application of a sales funnel in a ‘real-life’ situation.

Example 1: Fitness Business

A simple example would be to imagine a business that is trying to get people to purchase a comprehensive fitness program or subscription. This business would target their audience through Facebook or social media ads, for example, using a call-to-action (CTA). The CTA could be something like: “Download Our Beginner’s Exercise Guide”, or “Sign Up For A Free Fitness Programme Trail”.

People see this ad and click on the link to the landing page. From there, the prospect can download the guide or sign up for the free trial – giving the business their contact information at the same time. Once signed up, the prospective customer will receive emails from the business informing them of the business’s main offer. This is the middle of the sales funnel.

After enjoying the free program, the prospect then signs up for the fitness subscription or pays for the full fitness program, and becomes a customer. This happens when prospects reach the bottom of the sales funnel. After they make a purchase, the business then continues to send them newsletters, promotional offers, discounts, etc.

Example 2: Netflix

Now, let’s use Netflix as a ‘real-life’ example of an online sales funnel.

The first stage in Netflix’s sales funnel is their landing page. This is the top of the funnel where they offer their prospects a free 30-day trial for their streaming service. Three days before the trial ends, prospects are sent a reminder that it is about to end, after which they will be billed monthly.

In the middle of the sales funnel, the prospect looks at the pricing plans and chooses the one they want to continue with or cancel it altogether. If they choose to continue with a paid plan, they will sign up and fill in all their details on the order form before logging in to their account and successfully reaching the bottom of the sales funnel.

Sales funnel software tracks all of the actions taken by the prospects or leads throughout the sales funnel. This means that businesses can see exactly where leads are converting and where they are dropping off.

What Are The Sales Funnel Metrics?

The essential marketing metrics in sales funnels include conversion rates, volume, and velocity.

Conversion rates basically tell you how your overall marketing and sales strategies are performing. They measure from stage to stage within the sales funnel. If you have 1000 prospects opt-in to your email list and then 100 convert and become customers, it means you have a conversion rate of 10%.

Volume is used to determine whether your efforts toward your marketing is sufficient enough. For example, if you need to make a certain amount of revenue in a month, you need to determine how much further you need to push your marketing tactics to gain the responses you need to make that amount (based on your monthly averages.

Lastly, velocity refers to the length of your sales cycle. This metric comes from the length of time between the initial response and the closing deal. The velocity depends on what type of products you sell as high-ticket items can take a long time before the buyer makes their decision, whereas low-ticket items have a fairly low velocity as there is much less risk involved for the consumer.