The Ultimate Guide to Building a Sales Funnel

The Ultimate Guide to Building a Sales Funnel

A sales funnel is a strategy that is used by companies to improve their approach to marketing. This strategy gets its name from how it looks in diagram form — it looks like a funnel.

The top part is representative of the largest number of people who form part of the company’s marketing audience. This would be the potential customers that the marketing campaign will address. The bottom part is the smallest number and represents the number of actual committed customers. 

Brief Example of a Sales Funnel

A sales funnel is every step that is taken to get someone to be a company’s customer. For a physical store, a sales funnel would look a little like this:

People — at the top of the sales funnel — walk by the store. Only some of those people will enter the store, and they make up the next part of the funnel. 

A customer in the store then notices an item that is on sale and checks it out — this is the next part of the sales funnel. This customer selects a number of the on-sale items and, if all goes well, goes to pay for them. That would be the bottom part of the funnel.

This was a simplified explanation of how a sales funnel will generally look. Of course, it will be different for every company, but it tends to follow the same structure.

Why Does a Sales Funnel Matter?

In short, the sales funnel shows the path that prospective customers take. With this information, it can be determined what should be done to increase the chances of them making a purchase.

When you understand your own sales funnel, you can more effectively find holes and react accordingly. These holes will show where potential customers ‘drop out’ and do not become a buying customer.

If you understand your sales funnel, you will be able to optimize it and get the best possible results. Understanding it influences how you can make visitors become buyers.

How Sales Funnels Work

There are many terms that can be used to explain how a sales funnel works in practice. We will take a look at the four most common terms that are used in this kind of marketing planning. What we will discuss will give an explanation of how every stage of a funnel works as a person goes from visitor to prospect, lead, and buyer.

A person clicks on a link and lands on the front page of your website. This makes the person a ‘prospect.’ This prospect will likely take a look at your products on sale and maybe read some of your blog posts. 

During this time, your site should offer the prospect a chance to sign up for your company’s email list. If the form is filled out, the visitor becomes a ‘lead.’ Now you can market to this person outside the website through the information shared when the form was filled out.

You can lure leads back to your website when you send special offers, new information, or interesting messages to them. You could even offer discounts or coupon codes for this purpose.

At this point, your sales funnel has narrowed down significantly. Unfortunately, not everyone who uses your website will become a lead. 

The lead will become a buyer when they find something that they want to purchase. Sometimes (hopefully), this lead will return again and again, buying from you often.

Understanding the Four Sales Funnel Stages Better

There is a quick and easy way to remember the stages into which a sales funnel is divided.

AIDA: Awareness, Interest, Decision, Action: These stages are representative of your potential customer’s mindset. Every stage needs to be approached differently — there is no ‘one size fits all’ approach. It is important to have the right strategy when using this approach. You don’t want to end up asking a guest if they would like ice cream or cake for dessert before they even had the chance to eat their starters.

The Four Stages

Now, let’s take a closer look at the stages of a sales funnel.

Awareness

This sets everything in motion, so you need to successfully catch the attention of people at this stage. This could be done in many ways and is determined by your marketing strategy. You could use a Facebook post, a tweet, or even a video ad on YouTube.

The aim is for people to become aware of you and your company and what you’ve got to offer them.

If done right, potential customers can buy your product or service immediately. This doesn’t always happen, and that is why every stage of the funnel is equally important.

The Awareness stage is much like a courtship — you are trying to ‘woo’ people into returning to your site and spending their money on your items/service.

Interest

The second stage involves potential customers taking a closer look at your offer. They will do some of their own research to compare what you have to what others offer. You need to sell your product or service with great content at this point. 

You need to let people see why they need what you can give and why they shouldn’t approach your competition. However, this should be done delicately — people don’t like feeling they’re being sold to. Being pushy will make people turn away and not come back. 

What you want is to show off your services or products and make them look very appealing. Make it clear why what you’ve got is better than the thousands of offers from others doing the same. 

Decision

This is obviously the stage at which a potential customer decides whether or not they want to buy from you. You should be making your best offer here — what you do here will make or break the deal. 

Your approach could be free shipping, a discount, or a bonus product. This will be influenced by what your company is all about. Whatever you do, make people an offer that they cannot resist.

Action

The bottom of the sales funnel and the smallest part is the Action stage. This is when your hard work pays off and a lead becomes a buyer. A purchase is made, and everyone is happy, hopefully.

However, that does not mean your work as a marketer is done. You want the customer to come back again and again and again. The Action stage is as important for the customer as it is for the marketer. You want them to repeat their actions, ultimately ending in this stage every time.

This is called customer retention and is what makes companies grow and thrive. You can show customers that you are grateful for their support. This will make them feel good about buying from you. 

You could also invite them to reach out if they have any feedback and offer any support they could possibly need. Sincerely make the customer feel special and valued. Nothing puts off customers as easily as insincerity.

Example of an Effective Sales Funnel

Now that you have an idea of how a sales funnel looks when used by marketers, here’s an example that shows the stages in the real world.

An e-commerce company sells decorative decals. The target audience likes to hang out on Facebook — this kind of info is learned by doing thorough market research. You should also determine the ages of your audience to better understand which marketing approaches to take.

Now, the company creates an interesting and engaging Facebook ad to drive traffic to their landing page. 

On this page, people are asked to sign up for email lists. They become leads. Over the next few weeks, the company sends out emails that are filled with interesting and creative content. Perhaps these emails ask people to share their ideas for decorative decals and teach them how to use this kind of decoration.

At the end of the emails, the company offers a discount coupon off the first purchase made by the potential customer. This could lead to a nice boost in sales.

Once this is done, the company wants to keep the customer, so they add them to a new mailing list. This time, they are offered different content — how to remove decals, where they look best, etc. The company is asking previous customers to come back for more.

That is a simplified look at how a sales funnel works in real life. Now, you may be asking yourself how to build your own sales funnel. Stay tuned, because we’ll show you what you need to do.

How To Build a Sales Funnel

It may sound complicated and difficult, but building a sales funnel that works is not as difficult or daunting a task as you may think. We’ll discuss all the phases that go into the best sales funnel and guide you in the right direction.

Phase 1: Analyzing Audience Behavior

Knowing your audience is key to having a successful sales funnel. If you want people to buy from you, you need to know how they think. Remember, though, that you’re not marketing to the whole world — only your target market.

Determine user behavior on your website so you can figure out how they are interacting and engaging. What do they click? Where do they scroll? How much time do they spend and on which pages? There are many tools available to help you with this research

Phase 2: Capturing Attention

Naturally, your sales funnel will only be successful if you can get people to be a part of it. You need to lure them by giving them what they want. Your content has to grab the attention of the right people — your potential customers.

Post content on all your social media platforms, as well as your website and/or blog. Use videos, images, and infographics. If your marketing strategy allows it, run some ads, also. Be sure to run these ads where your audience is and nowhere else.

Phase 3: Have a Strong Landing Page

Your content and ads have to lead somewhere — your landing page. This needs to be a strong and effective page that better introduces people to your service or merchandise.

The focus must now go to capturing leads rather than pushing sales. As mentioned above, don’t be pushy. Your landing page needs to steer people towards the next step and get them to feel in control. Never make it so that visitors feel forced to do anything. If they feel forced, they may leave and not look back.

Phase 4: The Email Campaign

Everyone offers email signups these days, so you have to make sure that yours stands out. Give people amazing content and make them want more. Be interactive and engaging and consistent. However, don’t go into overkill mode. An email or two a week is enough. There is something to be said for quality over quantity.

You can build up to the sale by educating your audience about your company and service or products. You need to know what prohibits them from buying and remove those obstacles gradually. 

Then, you strike. You make an offer that they will not be able to let slip through their fingers. At this point, you have to make people feel like they don’t just want what you have to offer, they need it.

This is when your leads become customers, and if you’ve done it right, they’ll keep coming back.

Phase 5: Stay In Touch

Once you accumulate sales, your work still has to go on. Don’t forget about your existing customers as you try to gain new ones. Reach out to them regularly and remind them why they love your company. Thank them for their support and offer more goodies like coupons and special discounts. Reward your loyal customers with unique treats and try to involve them in your social media interactions.

There you have it — a brief guide to creating an awesome sales funnel.

Of course, this isn’t the end. You need to know if your funnel has worked and how well it performed, which brings us to the next point.

Measuring Your Sales Funnel’s Success

You may notice upon inspection that your sales funnel needs some tweaks. This is normal and part of growing a better strategy. Unless you’re very lucky, you won’t be 100% correct the first time. 

There is always room for improvement no matter how good your sales funnel is. You will be able to learn more about your customers as you measure the success of your funnel.

Track your conversion rates to see just how great your sales funnel did. Again, there are a variety of great tools available for this purpose. You should be checking for things such as how many people signed up to your email list after they clicked on your social media ads, among other things.

Some of the other questions you should be asking and acting upon include:

• Are existing customers returning?
• Did the email campaign secure purchases?
• Is the content getting enough people interested?
• Do people trust you enough to share their contact information?

When you know the answers to these questions, as well as many other similar questions, you will know what needs to be adjusted in your sales funnel. 

Why You Have to Optimize Your Sales Funnel

You may wonder why you should keep an eye on your sales funnel. Once it’s done, it’s done, right? Wrong. Your potential customers have thousands — if not millions — of options. Why should they support you? 

You need to earn the sales you want. People need to be shown why they should choose your product or service. You need to market effectively and efficiently. A good sales funnel is constantly changing as the needs of your audience changes.

An optimized sales funnel will get you better results over a longer period of time. You won’t be left guessing what people want. You will know what they want, and that will help you increase sales.

How Can You Optimize Your Sales Funnel?

There are many ways that you can make the most of your sales funnel and optimize it for even better results. The most attention should go to those areas where your potential customers move on to the different stages of the funnel. It is here where you will find your biggest weaknesses and strong points.

A/B Tests

This kind of testing, also known as bucket testing and split testing, is a way of comparing two versions of an app or website. The one that performs better is determined and made the main site or app. You can use this approach in your email campaigns. Make use of different language usages, images, and offers. You can determine the best way to reach your audience with this testing.

Use this testing to see what people think about your offers in the Action stage. Does giving people a discount work better than free shipping? It may seem like a small thing, but it can make a massive difference in making a sale or losing out on it.

Social Media Ads

Don’t limit yourself to just one ad. Run 10 or 20 of them and target all the social media platforms that your audience tends to frequently use. Your ads can be similar, but it’s best to change things up a bit.

Landing Page

Make sure that your landing page is as good as it can be. The offer and CTA (call to action) must be strong and effective. The format and language here must be consistent with what is in your ads and on your social media accounts. It must flow with the content in your emails.

Content

You have to ensure that your content speaks to the people reading it. Does it engage them? Does it make them want to support you? Determine what is effective and get rid of what isn’t. Change the content that doesn’t get as much attention. Make a point of getting to know the kind of content that your audience is hungry for. Also, check out your competition. What is working for them? What can you learn from that? Don’t steal their ideas, though. It won’t work, and it will tarnish your reputation. However, learn from your competitors and become better than them.

Customer Retention

You need to know if people are actually coming back for more of what you offer. This is essential because it boosts sales and could lead to positive word-of-mouth advertising. You want people to refer their friends, too, so find out if you’re retaining satisfied customers.

The best way to optimize your sales funnel is to pay attention to the results you get from analyzing its performance. This is where you learn about the best marketing strategies for your audience.

Conclusion

You now have a clearer picture of what a sales funnel is, how it works, and why you need it. Keep in mind that you need to take your time with this. Creating a successful sales funnel does not happen overnight, or even within a week. 

You will have to optimize even the best funnel to have the most impressive results. It may not be difficult, but it takes a lot of dedication and hard work. If you want to stand out and survive in a very competitive marketplace, this is necessary.

Pay close attention to every detail when planning and building the phases of your funnel. Even something as seemingly trivial as font changes can affect your sales conversion. 

Sales funnels offer wonderful opportunities to learn about the best strategies. Asking for a sale too quickly will scare off customers. This is something you will see when analyzing sales funnel results. With the help of a funnel, you will learn the fine art of marketing, and you will perfect it over time.

Our suggestion is that you take your time when you build your sales funnel. Create one that represents absolutely everything that you want to happen. It should also represent everything that your audience could possibly want. 

Grow the sales funnel over time, making adjustments and adding value to it. Once you’re happy with your sales funnel, put it into action and continue to learn from it. Never stop learning — this is the most important lesson of all.