What Is A Sales Funnel & How Does It Work? Complete Guide

To convert the website visitors into paying customers, any online business requires a Sales Funnel. Without the right sales funnel, a business can hardly make any money.

Successful businesses don’t just make sales, but they make sales consistently of high volumes. Hence, they can comfortably hire full-time working employees. Despite having recurring expenses, big companies are profitable and smoothly running.

The key to their success in consistent sales is the Sales funnel. The primary goal of a business with sales funnel is to move people from one stage to another until they are ready to purchase the product/service.

In this article, you will learn all about Sales Funnel and how it works. Let’s get started!

What Is A Sales Funnel?

A sales funnel (also known as a revenue funnel or marketing funnel) is a step-by-step buying process through which potential customers go on their way to purchase a product.

A sales funnel allows you to determine and reflect on your customers’ actions at every stage of the buying cycle. You can design a great customer experience along their journey.

The buying decision is empowered through a series of marketing actions like automated emails, articles, videos, and landing pages on the websites.

This marketing model uses a funnel as an analogy because many potential customers may start at the top end of the sales process. Still, only a fraction of those individuals actually ends up buying the product.

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

Why Is Sales Funnel Important?

The sales funnel a vital tool that systematically increases a company’s potential. A company relies on a sales funnel that gives insight into what customers would like to purchase. For any business to be successful, it is necessary to be alert and adapt to the changing market and customer needs.

In today’s digital world, people are spoiled because they have so many options. So unless you already rule the target market, you will need some way to show customers your worth and win them over.

A well-crafted sales funnel an ideal opportunity to show your value to the customers. They can get to know the team behind the product, which raises trust, leads to purchases, and helps to scale sales.

Stages of a Sales Funnel

There are different stages like the top, middle, and bottom of a sales funnel. These stages may vary according to a company’s sales model. It is essential to review the different sales funnel stages to understand and create a successful one fully.

The original sales funnel includes four cognitive stages through which a customer goes during the buying process of a product or service: Awareness, Interest, Desire, and Action. This model of the sales funnels stages is known as the AIDA model.

sales funnel
Image by John Conde from Pixabay

Stage 1: Awareness

The awareness stage is where your customers read about you for the first time. You make potential customers aware of what your company has to offer to them.

Here, your goal is to let people know that you exist and reach your target audience, especially people who haven’t heard about your business yet but can benefit from using your product or service.

Customers become aware of new companies through an advertisement, google search, a blog post, or a cold email. If a company conducts keyword research accurately, it can capture many leads early on by creating content targeted to buyers in the Awareness stage.

There are various methods to reach your target audience and build brand awareness. The tools that are typically used by businesses at this stage are:

1. Landing Page

A Landing page (also known as a sign-up page) is a simple website designed with a clear goal of getting customer details like email addresses and contact numbers to reach and advertise their products to them.

It is also used to show key features or vital information about the product or service. It has a clear call to action for interested people and wants to learn more about the product.

2. Content Marketing

Content marketing is an effective way to create brand awareness. Writing quality articles can increase traffic to your website through SEO and social media, allowing people to see you as an expert in your field.

3. Video

Video is another handy tool that can help build awareness and in business growth. Videos allow people to see inside out of a company and form a deeper connection with that company. It is usually used to demonstrate a product, its features, and benefits or share other ideas.

4. Facebook and Instagram Ads

You can set up targeted Facebook and Instagram ads and find new customers.

If you already have some people on your contact list, you can use the email addresses of your current customers to create a lookalike audience on Facebook Ads manager.

Using this method, the Facebook algorithm will find Facebook users with similar characteristics to those on your contact list who are most likely to become your customers.

5. Google Ads

Photo by Lauren Edvalson on Unsplash

By Utilising Google advertisements, you can contact individuals who are effectively searching for an answer your product/service could assist with.

Recognize the terms your target customers would probably type in a while looking on Google and show them your deal. You can likewise limit the targeting by giving negative catchphrases, for example, ones that don’t apply to what in particular you’re offering.

6. Word of Mouth and Referrals

Word of Mouth and Referrals will begin to create mindfulness for your business if your products/services and content are acceptable. While getting clients through references is pleasant, please don’t depend on it. Rather, form a genuine advertising framework that gives unsurprising income and results.

7. Lead Magnet Funnel

A lead magnet funnel is an automated approach to produce leads for your business. It permits you to establish a campaign that includes paid ads promoting a landing page with relevant signup incentives, follow-up email series, and analytics that display important statistics in real-time.

Stage 2: Interest

At the Interest stage, your prospects understand their problem and actively seek solutions and ways to achieve their goals. They search for solutions on Google, and usually, they take into account all available solutions to solve their issues.

Here, the brand will develop a profound relationship with their potential customers, becoming more actively involved in learning about their issues or goals.

In doing so, brands start by providing preliminary solutions, allowing them to experience ‘quick success’— and become more engaged.

For example, a customer is sure that he needs to fix his back pain, but he is unsure whether he should buy your mattress. In other words, he is searching for types of solutions instead of evaluating solution providers.

This is where you need content that can attract that customer and tell him how your mattress can help him get rid of the back pain and why he should buy it.

This may be the time when he shows his interest in your product or service and follows you on social media, and subscribes to your list.

The tools normally used at this stage are:

1. Engagement Score

The contact card shows all your contact data. One of the snippets you might find specifically valuable is the engagement score – a tool that recognizes and scores the movement of your contacts based on their reaction to your messages.

You can send better-targeted emails once you have created engagement-based segments.

2. Facebook Pixel

Facebook Pixel is a piece of code for your website that allows you to calculate, optimize and set up audiences for your ad campaigns. It helps you to chase landing page visitors.

Once people visit that page, you can see what people like and then develop customized re-marketing campaigns based on it. You can also define custom audiences based on the pages people visit or ignore to make the most out of your social media ads budget.

3. Marketing Automation

Marketing automation can create workflows that will send emails and assign tags on their own, based on user behavior. These tags can be used to determine what kind of content your prospective clients are most interested in.

4. Push Notifications

You can deliver push notifications to your website visitors and stay connected with them. Push notifications(web) do not require email addresses. Hence you can send rapid and hard-to-miss notifications to individuals who opt for them after visiting your site.

5. Email Marketing

sales funnel
Photo by Brett Jordan on Unsplash

Email marketing is a popular marketing strategy because it is relatively inexpensive. Create content that enlightens your customers and helps new leads eventually make an informed purchase decision.

When somebody gets on your email list, you can continue communicating with them by delivering emails. You can even utilize retargeting to show promotions to individuals who visited your site before so you can keep on building brand knowledge with those prospects.

Stage 3: Decision/Desire

At this stage, a potential customer is armed with information about your company and planning to decide. Your prospects are at the bottom of the funnel, knowing everything about their problem, and they are keen and ready to pay attention to what you offer.

They will dig deeper into your packaging, pricing, and many other things before they are ready to make a final decision to purchase. Webinars, Sales pages, and calls are really beneficial to encourage qualified prospects to make a purchase.

This is the time to offer the customers something special and set yourself apart from your competitors. Small factors like discounts, free shipping, or a free item can increase the chances of prospects completing their customer journey from top to bottom of the sales funnel.

Stage 4: Action

The customers make a final move at the very bottom of the sales funnel, i.e., the Action stage. They purchase your products or services, and you, at last, convert a quality lead into a client through a distinct sales process.

At this stage, you ought to think about transforming one buy into multiple purchases. When they start to understand the genuine worth of your product or service, they’re bound to purchase again and start with the sales cycle all over.

If they choose not to buy from you, your marketing efforts can still produce outcomes. It would be best if you remembered that the deal isn’t lost for always. You can build nurture campaigns to make sure you stay ahead in the league.

Furthermore, you can interact with your customers and urge them to leave feedback. You can have one more sales funnel stage that deals with customer retention.

Customer Retention

Along with the four Sales funnel stages, this stage is also important because a customer has shopped from you and is on board with your company.

A company’s focus should be on keeping customers happy and satisfied to turn them into regular customers and brand advocates. Word of mouth is a significant force, and happy customers are the best way to use it.

Helping the customers with any problem related to the products they bought from you makes them happy and loyal to your brand. You basically want your customers to stay engaged with your product or service, and you can do that by:

  • Special offers
  • Emails
  • Product usage guides
  • Surveys/Outreach and follow-ups
  • Technical assistance literature

How To Create a Sales Funnel?

Now, let’s discuss how to create a sales funnel for your business. Follow the steps mentioned below to set up the sales funnel stages to improve your sales process.

1. Create A Landing Page

Most people learn about your company for the first time through a landing page. Capturing quality leads should be your main goal at this stage, rather than forcing people to purchase your product or service.

If a customer clicks on an advertisement, downloads an ebook, or signs up for a webinar, they will be taken to a landing page. It is a fantastic idea to create a landing page and use your content marketing efforts to steer traffic to that page.

It should be able to deliver a clear message to the public about your company and the products/services it offers. It should have all the unique benefits your products will offer to the customers.

Also, it must contain a form for people to fill in their information like email address, mobile number, so you can continue to interact with them.

A landing page should be used as a vehicle to take your prospective customers from the top stage to the next in the sales pipeline. Hence, it must have an explicit call-to-action telling your customers what they should do next.

2. Create Buyer Personas

Every customer is different from every other, and hence, you can’t have the same sales funnel for all of them. People are unique because they have different reasons for buying a product and different ways of making a buying decision or using it differently.

Therefore, creating separate buyer personas for each category is effective, and creating different sales funnels to enhance their experience.

You need to understand your audience accurately to establish a genuine connection with them. This will result in more people going through your sales funnel and a high chance of turning them into paying customers.

3. Lead magnet (Offer Something Of Value)

sales funnel
Photo by Tamanna Rumee on Unsplash

The lead magnet must give a deep insight or real value to be impressive. It should be something a user can hardly trust to be free and encourage him to become a paying customer.

There are various types of lead magnets. Some useful lead magnets are as follows:

  • An ebook
  • A video course to acquire a new handy skill
  • A free subscription to a newsletter or magazine
  • A webinar and much more

You can set any of the lead magnets you like and can change them whenever you want to.

4. Engagement Strategies (Nurture)

You have put big efforts into lead generation. Now, you need to constantly engage your leads at every stage of the funnel, inform them about the topics they are interested in and help them slide down your sales pipeline.

You should have great content to keep them engaged, and for that, you can use:

  • Blog posts
  • Videos
  • Podcasts
  • Social media posts
  • Facebook Live

You have obtained the email addresses of many prospective customers from the landing page. With that, you can develop an email nurture series to share useful content about your products.

5. Upsell

It would help if you offered something that pushes the prospects in making a purchase decision. This could be done using sales tactics like a free trial, product demo, or special discounts.

6. Closing Strategies

Photo by Sora Shimazaki from Pexels

It is crucial to create needs for your target audience and then make clear offers that satisfy their needs. This will increase sales and help in business growth.

Finally, the marketing strategies that you use to convert your prospects into clients are:

  • Sales call and sales email
  • Sales and product pages
  • Webinars

7. Stay Top of Mind

In the Action stage, you will either land new customers or discover that customers aren’t interested in buying. Either way, you have to make sure to nurture your connection with customers whether they complete the sales funnel or not.

Focus on giving product information to new customers and keep them engaged. Please create a new nurture series for prospects who didn’t buy from you to keep in touch with them.

How To Optimize Your Sales Funnel

sales funnel
Photo by Lukas from Pexels

Missing a sale is very painful. Potential customers can drop out of the sales pipeline after days of content creation and pitches.

This usually happens when a company’s sales team doesn’t optimize the sales funnel. It’s essential to evaluate sales funnels if they are not generating sales.

Forgotten follow-ups, inappropriate messaging, missed appointments are some of the holes in sales funnels and they can be easily fixed. The marketing strategies mentioned below will assist you to optimize your sales funnel:

Use A CRM Software

If you wish to make your sales and marketing processes smooth, use a CRM like HubSpot to make your sales funnels work excellently.

The HubSpot Growth Platforms tools make it convenient to create and maintain an effective sales process that produces results.

Use Social Proof In Your Sales Funnels

Social proof escalates the conversion rate so that you can use it in your sales funnels and other marketing efforts. Social proof from existing customers, credible industry experts, and others can be of great help.

If you sprinkle social proof throughout your sales funnel, you’ll give your clients the confirmation they require to feel confident.

Modern customers have more trust in their peers than the brands they buy the products from. With the help of social proof, customers can understand what they will get when they do business with a particular brand.

Social proof can be of many forms:

  • Short endorsements
  • Long-form testimonials and video testimonials
  • Written case studies
  • User-generated content
  • Pictures and videos posted on social
  • Logos or trust seals
  • Before and after images
  • Numerical reviews and ratings

Locate Cracks in Your Sales Funnel

If you aren’t able to make sales like you want then try something different or try to find out the cracks in your sales funnel. Some ways to fix the cracks in your sales funnel are:

  • Re-visit your sales funnel- Be sure to break all the barriers at all sales funnel stages and make things effortless for customers to engage with you.
  • Check your initial lead response time- As per InsideSales.com, 35 to 50% of sales go to the seller that responds first. This means you have to prioritize quick responses to leads because speed wins deals!

Observe Relevant Data

Tracking your performance is very important. Setting realistic goals and then calculating your performance against those goals is the correct way to operate.

Scrutinize the relevant analytics, because it helps you to control relationships between you and your customers perfectly. Google Analytics is a really helpful tool that allows you to organize and supervise your sales efforts easily.

I hope that you have now understood the sales funnel and how it works exactly. Thank you for reading this article patiently and if you want to read more interesting articles like the one you just read, click here.

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