What is a Sales Funnel?

A sales funnel is the customer journey that someone takes before making a purchase. While a consumer may not buy your product the first time they discover your business, a sales funnel allows you to move them from one stage in the customer journey to the next.

As a result, they may decide to buy later on. How quickly a person is moved through the funnel depends on the different tactics your sales teams use throughout.

Keep in mind that a sales funnel is not the same as a sales pipeline. The sales pipeline is the overall process and stages involved in converting leads into customers.

In contrast, the sales funnel focuses specifically on visualizing and understanding how leads move through those stages. 

Essentially, the sales pipeline encompasses the broader strategy and framework for managing sales activities, while the sales funnel provides a more granular view of the customer journey. 

How does a sales funnel work?

Sales funnels reach customers at every stage of the buying journey. While the experience will be unique for each potential customer, there are 4 stages they'll go through.

Awareness

The awareness stage is when your customer first learns about your product. However, the depth of awareness is different for every potential buyer.

Some people may have extensive knowledge of your products or services, while others might only know a little. In both cases, they're aware, but one may not have as much interest in what you're offering at this time.

Interest

A customer that moves onto the interest phase of buying what you're selling puts them a step closer to purchasing. However, interest doesn't always indicate that they'll see the need for your products or services.

Customers can express enthusiasm about what you're selling and still not buy. Why is that? Well, it's because interest doesn't always indicate a need.

Potential customers can show interest in your offerings all day and night, but they may not find it helpful enough to finalize the sale.

Decision

Sometimes, it's challenging to gauge how much time to spend on a customer who may not buy from you. You can't always predict what they'll do, but you can watch for signs that demonstrate their readiness to buy.

If potential customers don't buy from you and don't have any further questions after showing interest, they probably decided what you have isn't for them. They more than likely made up their minds and won't buy from you at this time.

If a customer shows interest and still has questions about what you're offering, they might be close to making a decision. You know they're almost ready to buy if they ask questions about quantities, price, subscription terms, and so forth.

However, beware when trying to assess whether a person will buy or not. They could be stuck in between the interest and decision sales funnel stages for days, weeks, months, or years. In this case, it's best to ask permission to keep them on your newsletter list and leave them alone for a while.

For example, a customer may not make a decision to buy yet. However, they may be ready to opt into your email or text messaging subscription list.

Action

At the action stage, customers are probably adding items to their shopping carts and are ready to check out. Someone or something may have interrupted them if they don't follow through with the purchase.

For instance, someone may really want to buy an item, but they don't have their credit card on hand. Then, they perhaps forgot about completing the transaction when looking for their credit card. Maybe a storm occurred, and the person trying to place an order had a sudden power outage. Or, an individual's child may require assistance while they're mid-transaction.

Keep in mind that other customers may simply change their minds last minute. Some consumers also add items to their shopping carts to calculate how much they'll have to pay.

Regardless of the circumstances, an abandoned cart email can keep your business top of mind and encourage consumers to finish buying.

Sales funnel vs. marketing funnel

You likely will notice some overlap between the marketing and sales funnel steps. After all, the end result is eventually to make a profit. However, the sales funnel prioritizes putting your products and services out there.

Sales funnels also guide customers into a decision-making process. You do this by offering low-pressure support, making it clear that they can take their time to decide.

Marketing funnels are a bit different. They typically focus on brand awareness, which is the process of making customers aware of who you are and what you're selling.

Regardless of the differences, both types of funnels can support your sales and marketing efforts.

Reasons your business needs a sales funnel

Don't take your current entrepreneurial success for granted. You never know when the market will change, and you don't know when customer demands will shift. Keep anticipating their needs and continue to provide essential products and services.

Furthermore, it's wise to provide buyers with upselling opportunities after they have made their first purchase from you. Sales funnels also help you execute systematic customer relationship nurturing at every decision-making phase.

In addition, sales funnels enable you to keep track of customers throughout the decision making process. Here are a few other reasons your business needs a sales funnel.

Increase sales

You should never feel bad about wanting to make more money. That's the reason why you're in business in the first place. The potential as an entrepreneur is to increase sales as long as you know how to influence your customers via a sales funnel.

Boost trust

A sales funnel usually includes facts, data, and stories that compel customers to make a wise decision. The most effective sales funnel pages will also boost trust between your customers. That's because they'll know they're making an informed decision, and increased confidence drives sales

Grow your audience

When it comes to the crossover between a sales funnel and a marketing funnel, both will help you grow your audience.

Build customer loyalty

This pertains to any stage of the sales decision-making process. However, your regular customers will establish loyalty to you if you give them a reason to be loyal.

The upselling phase of a sales funnel and your marketing campaigns can increase customer loyalty. For instance, you can provide a higher subscription tier at a discount for your regular customers to try.

Generate qualified leads

Sometimes, you have to patiently groom your customers for success. This may require you to find ways to draw them in with free email-based education or other complimentary tutorials.

You might offer free trials or added products when a customer makes a minimum amount of purchases. There are several ways you can generate leads using your sales funnel and connected email campaigns.

If you're interested in creating your own sales funnel to drive qualified leads, here's how to build one.

1. Determine your target audience

You may need to conduct market research to understand and identify your target audience. This may be done through test product sales launches or surveys. You can also gather information on social media or review your website's analytics.

2. Identify your goals

Not having goals is like shooting a target and not concentrating on where you want the projectile to land. You may not always hit your goals on the first try, but having objectives still increases your chance that you'll “aim” in the right direction.

3. Create a landing page

Think of your landing page as being your front porch. Sometimes, you have to stand at the door and wave visitors in. That's what a landing page will do for you as you develop your sales funnel.

4. Generate awareness

Landing the sale is challenging when people have no idea you or your products and services exist. So, you need to find a way to generate awareness.

You can obtain attention with email marketing or by posting on social media to your followers.

Connect with people when it matters with our suite of automation features: customized purchase paths, email scheduling, custom triggers, and more.

5. Nurture leads

People are fickle. The indecisiveness worsens when customers feel overwhelmed with all their options.

They can eliminate you as a choice as fast as they consider you. Nurture your leads before they lose interest altogether and you never hear from them again.

Regarding leads, you need qualified ones. This ties in with ensuring you know your ideal target audience.

This process becomes easier after you have some data about who's buying from you. You can use this information to promote your products and services to an ideal buyer persona.

6. Provide value

Make sure you provide consumers with value. Market research and experience tie into this, and so does making sure you anticipate your customers' needs ahead of time and not just when they occur.

7. Retain customers

Regular communication with your customers is the best way to retain them. Teach your sales reps to show concern for every client. You also should demonstrate that you welcome customer feedback and want to continue serving them even after the sale process is done.

8. Optimize your funnel

Your funnel is more than just a sales page to raise hype. It also can include informative content that uses keywords and topics consumers care about.

Optimizing your funnel also calls for testing your CTA (call-to-action) buttons, so they'll load properly. Having pages that load correctly will reduce abandoned shopping carts.

A few more ways you can optimize your funnel are:

Implementing email marketing strategies

Businesses use email marketing to stay in communication with their prospects and audience throughout the buyer's journey. 

By sending targeted and personalized emails, you can nurture leads. Craft compelling email sequences that address the needs and interests of your prospects at each stage of the funnel, from awareness through the interest stage and at the bottom of the funnel, where decision-making happens. 

Integrating social media into your funnel

Social media platforms let you connect with prospects, share valuable content, and showcase your products and services. 

Develop a social media strategy that aligns with your funnel goals, leveraging different platforms to reach prospects where they spend their time online. Engage with your audience, respond to their inquiries, and encourage interaction to build trust and credibility. 

Advanced sales funnel tactics

Regardless of your company's sales model, a successful sales funnel can enhance your ability to drive conversions and maximize revenue. These tactics go beyond basic lead generation and focus on optimizing various sales funnel aspects to extract the maximum value from each customer interaction.

Here are a few advanced sales tactics: 

Upselling and cross-selling strategies

Ever been asked if you want to "supersize" your meal at a fast-food restaurant? That's upselling. They're trying to get you to spend a little more by upgrading your order. 

Cross-selling is when a store suggests you buy batteries when purchasing a new gadget. These tactics can help businesses make more money from each customer by offering them related or upgraded products. 

Leveraging user-generated content

User-generated content (UGC) includes customer reviews, testimonials, social media posts, and other content users or customers create. Incorporating it into your sales funnel can provide social proof, validate the quality of your products or services, and influence purchasing decisions. 

Implementing retargeting campaigns

To improve customer retention, you should always retarget your existing customers. By targeting ads to individuals who have previously interacted with your website, products, or content, you can re-engage them and encourage them to return to the website and complete the conversion process. 

Delivering personal ads and offers based on the user's past behavior and interests can help businesses effectively nurture leads, increase brand awareness, and drive conversions. 

Integration with CRM systems

Integrating the sales funnel with a customer relationship management (CRM) system can streamline sales, enhance communication with leads and customers, and improve overall efficiency. 

A CRM enables businesses to track customer interactions, manage leads and contracts, and gain valuable insights into customer behavior and preferences. 

Integrating your sales funnel with a CRM system allows you to automate tasks, segment leads based on their stage in the sales funnel, and deliver personalized communications tailored to their individual needs. 

Personalization techniques for enhanced engagement

Personalization creates meaningful and relevant customer experiences throughout the sales funnel. By leveraging customer data, businesses can deliver personalized content, recommendations, and offers to each individual prospective customer. 

With dynamic content, product recommendations based on past purchases or browsing history, and targeted email marketing campaigns, businesses can increase engagement, build loyalty, and drive conversions. 

Measuring sales funnel effectiveness

Measuring the effectiveness of your sales funnel tells you how well different aspects are working and where you might need to make adjustments.

One way to do this is by looking at key performance indicators (KPIs). These show you important numbers, like how many people are visiting your website, how many of them are becoming leads, and how many are actually making purchases. 

Businesses often use tools and analytics platforms to track these KPIs. These tools gather data from various sources, like your website, social media, and email campaigns, and turn it into easy-to-understand reports. They can help you see which aspects of your sales funnel are performing well and which aren't.

Once you have this data, the next step is interpreting it to optimize your conversions. This means figuring out what's working and what's not so you can make adjustments to improve your results.

For example, if you notice that many people are leaving your website without buying anything, you might need to simplify your checkout process or offer a better incentive to buy. 

Using data to guide your decisions can make your sales funnel more effective and drive more revenue for your business. 

When it comes to sales funnels, one size doesn't fit all. Different industries have unique needs and customer behaviors, so it's essential to adapt your approach accordingly.

Let's explore how sales funnels can be tailored for various industries to maximize their effectiveness and drive results.

E-commerce

E-commerce sales funnels need to focus on guiding customers smoothly from browsing products to making a purchase online. This often involves strategies like personalized product recommendations, cart abandonment emails, and streamlined checkout processes to minimize friction and encourage conversions.

SaaS

For Software as a Service (SaaS) companies, the sales funnel typically revolves around offering free trials or demos to entice potential customers. The goal is to showcase the value of the software and address any pain points or objections users may have before committing to a subscription.

B2B

In the business-to-business (B2B) sector, sales funnels often involve longer decision-making processes and multiple stakeholders. Therefore, strategies may include:

• Nurturing leads with educational content.
• Conducting personalized demos or consultations.
• Building trust through case studies or testimonials.

Brick-and-mortar retail

Brick-and-mortar retail sales funnels focus on creating engaging in-store experiences to drive foot traffic and encourage purchases. This can involve tactics like eye-catching displays, in-store promotions, and loyalty programs to encourage and incentivize repeat visits and purchases.

Enhance your sales funnel with Mailchimp

A sales funnel is essential for every business, regardless of size and industry. Not only can it help you encourage customers to buy, but it can also allow you to build loyalty and trust.

Now that you know what a sales funnel is, it's time to make sure your customers make it through the sales process. With our collection of marketing tools, you can create, schedule, and send optimized emails at just the right time and to the right people. As a result, you can effectively move them through the funnel.

Connect with people when it matters with our suite of automation features: customized purchase paths, email scheduling, custom triggers, and more.