What is a Sales Funnel, Examples and How to Create One (Guide)
Your sales funnel exists whether you know it or not. If you’re aware of the funnel, however, you have much more influence over it.
What matters most when it comes to your sales funnel? Website optimization.
Each of the sales funnel stages has an impact on consumer behavior, and you need to know them intimately.
Starting with your website allows you to glean information from data and better understand your audience.
The sales funnel concept becomes even easier to understand when you relate it to how people navigate your website and reach buying decisions.
What is a marketing sales funnel? And why is a sales funnel important? Let’s dive in.
What is a Sales Funnel?
Here’s the sales funnel explained in the simplest form: The path website visitors take on the way to buying your product or service. Some people never leave the top of the sales funnel, while others reach the very end.
The good news? You have influence over how many people reach the bottom of the sales funnel.
Let’s step away from your website for a moment and look at a brick-and-mortar sales funnel as it might play out.
The people at the top of the sales funnel walk into the store. They’re “just browsing.” A sales associate greets them warmly and offers assistance.
A customer sees a rack of T-shirts on clearance. He or she thumbs through the rack, and a sales associate connects with him. She tells him she can offer a further discount if he buys three or more T-shirts.
The customer’s intrigued by the offer and selects four T-shirts. Then, at the point-of-sale, the sales associate recommends a hat with the same theme as one of the T-shirts. The customer adds the hat to his purchases, pays for the items, and leaves.
That’s not the end, though. The customer is so pleased with the deal he got, he comes back three weeks later to buy more T-shirts.
This same process plays out on your website. In place of the sales associate, you have pages to help guide visitors through the sales funnel.
The good news? You have influence over how many people reach the bottom of the sales funnel.
Let’s step away from your website for a moment and look at a brick-and-mortar sales funnel as it might play out.
The people at the top of the sales funnel walk into the store. They’re “just browsing.” A sales associate greets them warmly and offers assistance.
A customer sees a rack of T-shirts on clearance. He or she thumbs through the rack, and a sales associate connects with him. She tells him she can offer a further discount if he buys three or more T-shirts.
The customer’s intrigued by the offer and selects four T-shirts. Then, at the point-of-sale, the sales associate recommends a hat with the same theme as one of the T-shirts. The customer adds the hat to his purchases, pays for the items, and leaves.
That’s not the end, though. The customer is so pleased with the deal he got, he comes back three weeks later to buy more T-shirts.
This same process plays out on your website. In place of the sales associate, you have pages to help guide visitors through the sales funnel.
Why is a sales funnel important?
Your sales funnel illustrates the path website visitors take before purchasing items.
Understanding your sales funnel can also help you find the holes in the funnel — the places where visitors drop out and never convert.
If you don’t understand your sales funnel, you can’t optimize it. We’ll go into the specifics of how the funnel works below, but for now, understand that you can influence how visitors move through the funnel and whether they eventually convert.
That’s called marketing. But it’s specific, targeted, and specially designed for your target customer.
Understanding your sales funnel can also help you find the holes in the funnel — the places where visitors drop out and never convert.
If you don’t understand your sales funnel, you can’t optimize it. We’ll go into the specifics of how the funnel works below, but for now, understand that you can influence how visitors move through the funnel and whether they eventually convert.
That’s called marketing. But it’s specific, targeted, and specially designed for your target customer.
The Sales Funnel Explained: How it Works
While there are lots of words used to describe different sales funnel stages, we’re going to go with the four most common terms to explain how each stage works as a consumer goes from a visitor to a prospect to a lead to a buyer.
A visitor lands on your website through a Google search or social link. He or she is now a prospect. The visitor might check out a few of your blog posts or browse your product listings. At some point, you offer him or her a chance to sign up for your email list.
If the visitor fills out your form, he or she becomes a lead. You can now market to the customer outside of your website, such as via email, phone, or text — or all three.
Leads tend to come back to your website when you contact them with special offers, information about new blog posts, or other intriguing messages. Maybe you offer a coupon code.
The sales funnel narrows as visitors move through it. This is partially because you’ll have more prospects at the top of the funnel than buyers at the bottom, but also because your messaging needs to become increasingly targeted.
A visitor lands on your website through a Google search or social link. He or she is now a prospect. The visitor might check out a few of your blog posts or browse your product listings. At some point, you offer him or her a chance to sign up for your email list.
If the visitor fills out your form, he or she becomes a lead. You can now market to the customer outside of your website, such as via email, phone, or text — or all three.
Leads tend to come back to your website when you contact them with special offers, information about new blog posts, or other intriguing messages. Maybe you offer a coupon code.
The sales funnel narrows as visitors move through it. This is partially because you’ll have more prospects at the top of the funnel than buyers at the bottom, but also because your messaging needs to become increasingly targeted.
Understand the 4 Sales Funnel Stages
It’s easy to remember the four sales funnel stages by the acronym AIDA: Awareness, Interest, Decision, and Action. These four stages represent your prospective customer’s mindset.
Each stage requires a different approach from you, the marketer, because you don’t want to send the wrong message at the wrong time. It’s kind of like a waiter asking you what you want for dessert before you’ve even ordered drinks and appetizers.
Let’s look at each stage in the sales funnel in more detail.
Each stage requires a different approach from you, the marketer, because you don’t want to send the wrong message at the wrong time. It’s kind of like a waiter asking you what you want for dessert before you’ve even ordered drinks and appetizers.
Let’s look at each stage in the sales funnel in more detail.
Awareness
This is the moment at which you first catch a consumer’s attention. It might be a tweet, a Facebook post shared by a friend, a Google search, or something else entirely.
Your prospect becomes aware of your business and what you offer.
When the chemistry is just right, consumers sometimes buy immediately. It’s a right-place, right-time scenario. The consumer has already done research and knows that you’re offering something desirable and at a reasonable price.
More often, the awareness stage is more of a courtship. You’re trying to woo the prospect into returning to your site and engaging more with your business.
Interest
When consumers reach the interest stage in the sales funnel, they’re doing research, comparison shopping, and thinking over their options. This is the time to swoop in with incredible content that helps them, but doesn’t sell to them.
If you’re pushing your product or service from the beginning, you’ll turn off prospects and chase them away. The goal here is to establish your expertise, help the consumer make an informed decision, and offer to help them in any way you can.
Decision
The decision stage of the sales funnel is when the customer is ready to buy. He or she might be considering two or three options — hopefully, including you.
This is the time to make your best offer. It could be free shipping when most of your competition charges, a discount code, or a bonus product. Whatever the case, make it so irresistible that your lead can’t wait to take advantage of it.
Action
At the very bottom of the sales funnel, the customer acts. He or she purchases your product or service and becomes part of your business’s ecosystem.
Just because a consumer reaches the bottom of the funnel, however, doesn’t mean your work is done. Action is for the consumer and the marketer. You want to do your best to turn one purchase into 10, 10 into 100, and so on.
In other words, you’re focusing on customer retention. Express gratitude for the purchase, invite your customer to reach out with feedback, and make yourself available for tech support, if applicable.
An Effective Sales Funnel Example
Imagine that you own an ecommerce business that sells vintage signs. You know that your target audience hangs out on Facebook a lot and that your target customers are males and females between 25 and 65 years of age.
You run a fantastic Facebook Ad that drives traffic to a landing page. On the page, you ask your prospect to sign up for your email list in exchange for a lead magnet. Pretty simple, right?
Now you have leads instead of prospects. They’re moving through the funnel.
Over the next few weeks, you send out content to educate your subscribers about vintage signs, to share design inspiration, and to help consumers figure out how to hang these signs.
At the end of your email blitz, you offer a 10 percent coupon off each customer’s entire first order. Bang! You’re selling vintage signs like crazy. Everyone wants what you’re selling.
Next, you add those same customers to a new email list. You start the process over again, but with different content. Give them ideas for gallery walls, advise them about how to care for their signs, and suggest signs as gifts. You’re asking them to come back for more.
There you have it:
You run a fantastic Facebook Ad that drives traffic to a landing page. On the page, you ask your prospect to sign up for your email list in exchange for a lead magnet. Pretty simple, right?
Now you have leads instead of prospects. They’re moving through the funnel.
Over the next few weeks, you send out content to educate your subscribers about vintage signs, to share design inspiration, and to help consumers figure out how to hang these signs.
At the end of your email blitz, you offer a 10 percent coupon off each customer’s entire first order. Bang! You’re selling vintage signs like crazy. Everyone wants what you’re selling.
Next, you add those same customers to a new email list. You start the process over again, but with different content. Give them ideas for gallery walls, advise them about how to care for their signs, and suggest signs as gifts. You’re asking them to come back for more.
There you have it: