What is a Sales Funnel and Why is it Important?

A sales funnel is each step that someone has to take in order to become your customer. Your sales funnel spells out the path a prospect follows to become a customer. Any marketing channel can be part of your sales funnel. And your funnel might be spread across several channels.

 

Why is a Sales Funnel Important?

Understanding your funnel helps you find the gaps in your process for winning new customers – the places where prospects drop out and never convert.

If you don’t understand your sales funnel, you can’t optimise it. I’ll go into the specifics of how the funnel works below, but for now, understand that you can influence how prospects move through your funnel and whether they eventually convert.

 

How it Works

There are lots of words used to describe different sales funnel stages, so it can seem very confusing. I’m going to use 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. They are now a prospect. They might check out a few of your blog posts or browse your product listings. At some point, you offer them a chance to sign up for your email list.

If the visitor fills out your form, they’ve become a lead. You can now market to the customer outside of your website, such as via email, phone, or text — or all three depending on the information you asked them for.

Leads tend to come back to your website when you contact them with special offers, information about new blog posts, or other intriguing messages.

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.

 

Understanding the 4 Sales Funnel Stages

Before you start building your sales funnel, it is essential to have a clear business vision, develop an ecommerce marketing strategy, and then define your target audience to work towards your business growth. If, for example, you are looking at how to create an online clothing store, you need to follow specific steps to develop your business and stay successful.

You can design your sales funnel with as many stages as you want. Each of the sales funnel stages has an impact on how someone going through your funnel will behave. That’s why it’s important to have a clear idea of who your ideal client is.

By knowing each step, you can use tactics to improve the number of people that go from one step to the next.

From the first time your prospect hears about you until the moment he buys from you, he passes through different stages of your sales funnel. This journey might differ from one prospect to the next depending on your buying personas, your niche, and the types of products and services you sell.

The four basic Sales Funnel stages are AIDA:

• Awareness
• Interest
• Decision
• Action

Defining and managing your sales funnel is one of the most powerful concepts in business.

 

AIDA Sales Funnel

Awareness

At this stage, the prospect learns about your existing solution, product, or service. They might also become aware of the problems that they need to solve and the possible ways to deal with them.

This is when they visit your website for the first time, which they found from an ad, Google search, a post shared on social media or another traffic source.

Interest

At this stage, the prospect is actively looking for solutions to their problems and ways to achieve their goals. They search for solutions on Google. This is when you can attract them with some great content.

Now is the time when they express their interest in your product or service. They follow you on social media and subscribe to your list.

Decision

At this stage, the prospect is making the decision that he wants to take advantage of your solution.

They are paying more attention to what you offer, including different packages and options, so he can make the final decision to purchase. This is when sales offers are made by using sales pages, webinars, phone calls, emails.

Action

At this stage, the prospect is becoming a customer by finalising the deal with you. They’re signing the contract and clicking the purchase button. Then the money is transferred to your bank account.

It’s important to know that there might be additional stages to your sales funnel. Your interaction with your customer shouldn’t end with a successful first stage. You worked hard to get them to purchase from you and now you want them to continue with you.

 

The Next Stage

Retention

At this stage, you have your customer on board and you need to focus on keeping them happy to convert them into repeat customers and brand advocates. Word of mouth is a powerful force and no one can do it better than a happy customer.

To keep customers happy, you need to help your customers with all aspects and problems related to what they bought from you. Basically, you want them to stay engaged with your product/service. You can do that by sharing content such as:

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

 

How to Use Content for Each Stage of The Sales Funnel

According to ringDNA, one of the biggest mistakes marketers make is that they don’t align their content marketing efforts with their sales funnel stages so they can close more deals.

More often than not, they don’t go deep enough or look into lucrative avenues like repurposing their existing content to increase reach. Hence, their prospects don’t progress through the funnel.

You can use different content for each stage of your sales funnel, here’s how:

Blogging (awareness and interest)

By blogging, you will generate awareness and interest for your solution.

It could be your main source of traffic for your website, and it’s also a good way to engage your list by sharing valuable content.

The way you bring awareness by blogging is to optimize your content with the right keywords so you can attract your target customers from an organic search. Acquiring customers is essential to a flawless marketing funnel strategy that grips viewers and turns them into consumers.

Another way is to promote your posts on social media by influencing other people to share them or by using promoted posts.

It’s important to state that blogging is not a “bottom of the funnel” activity.

In other words, it won’t lead to people making a decision to buy from you. For that, you will need to create other types of content or push people to go on a sales call with you.

Lead Magnets (interest)

You grow your email list by offering something of value to your audience that they’re already interested in, such as a guide or course. Any type of lead magnet is used as a tool to generate interest in your product. Anything that can educate your prospects on how they can solve their problems and achieve their goals.

And during that time, you can start building the demand for your product. Within the lead magnets itself, you can place call-to-actions to:

• check out your products/services,
• call your sales department, or
• join a webinar.

Webinars (decision)

Even though webinars can be used as lead magnets, they’re more focused on the decision stage and convincing people to take action and buy your products. When people sign up for webinars, they’re already pretty interested in achieving a certain goal or solving a specific problem. This could be anything from growing their traffic, losing weight to finding the perfect soul mate.

Your goal with the webinar is not only to educate them but to build their demand in order for them to take action. At the end, you should always have a call-to-action to buy your product, start a free trial or request a consultation.

Videos (awareness, interest, decision, action)

They can be used in pretty much all the stages of the sales funnel. YouTube is well-known as the second largest search engine, so by optimizing the videos for certain keywords, you can generate tons of awareness and traffic to your website.

Additionally, you can use services like Wistia to embed educational videos within your blog posts and your website to educate your audience on topics that interest them.

By creating explainer videos, you can build demand for your product or service.

Last, but not least, with sales videos you can entice people to make the final step and take action.

 

Social Media and your Sales Funnel

Now, let’s explain how social media fits within your sales funnel strategy.

Awareness and Traffic

The initial goal of social media is always to attract website visitors to your website and build an audience in the cheapest possible way.

Too often, small businesses with very small audiences or email lists are so enthusiastic to try Facebook Ads after hearing all about “demographic custom audiences,” that they immediately jump into re-targeting their (small) audience. And while they may temporarily see results, the audience exhausts itself due to the frequency of the Facebook Ads killing their performance over a few weeks.

So, your goal here should be to generate more traffic to your website and blog by influencing more people to share your content and by promoting it with ads.

Generating Leads (lead magnets)

You can also promote your leads magnets on social media to generate leads or include a link to the landing page in your email signature. According to a recent Newoldstamp report, 34% of businesses that use email signatures for marketing generate leads by adding CTAs or clickable banners to their sign-offs. Email signature marketing platforms like Newoldstamp or WiseStamp allow you to automate the process.

This could be done well when your audience already has an interest in the content and solution that you offer.

Keep in mind that 97-99% of people will not be ready to purchase, therefore it’s a much better move to turn them into email subscribers rather than hit them with a hard sell.

Engagement

Social media has a much higher engagement rate than email. We all know how Facebook videos can go viral as people are more likely to share and comment on them.

One of the newest ways to also engage your audience is to use Facebook Live. The biggest advantage here is that you can interact with your audience in real time – they can see and hear you. This is a great opportunity here to use it to build a demand for your product and even sell your services. You can also go Live on LinkedIn, YouTube and Instagram.

 

Creating your Sales Funnel

Now it’s time to create your sales funnel. For that, you can use the following step-by-step template:

Gather Data and Understand Your Customers

The best way to do that is to talk to them. According to Matt Ackerson from Petovera by doing that, you will understand their needs and frustrations – and how well (or not) your offer helps to solve their problem. That way you can adjust your funnel to focus on those key and most relevant selling points. You may also gain insights that lead you to adjust your product or service and make it better.

The most important questions you should ask your customers are:

What are your current challenges with [the area that you cover]?

What are your current fears and frustrations? What are your goals and aspirations?

What have you done to try to solve your problems/achieve your goals? How well did it work?

Based on the feedback, you can create content for each stage of your sales funnel and help prospects move down your pipeline.

Create Buyer Personas/Customer Avatars

The truth is you can’t have the same sales funnel for all your customers. Probably because:

• They have different reasons for buying your product
• They’re going to use it differently
• They make buying decisions in different ways.

It’s a lot smarter to create different buyer personas for each of your customer types and create different sales funnels to better match their experience.

You need to understand your audience like you do your very own yourself. You know your own dislikes and likes, you know what problems you face and you know the sort of people you will let help with those problems. If you learn to know your audience in the same way, the chances of you establishing a genuine connection increase vastly. You will also be able to guide more people through your sales funnel and get those coveted ‘closed-wins’.

Traffic and Lead Generation Strategies

There are different directions you can go here –

• paid traffic,
• “free” traffic or
• cold outreach or
• a combination of the three.

The paid traffic is the easiest way to bring traffic to your website. You pay for an ad and as soon as someone clicks on it, you will have a visitor to your website. To do this you can use:

• Google AdWords
• Facebook Ads
• X (formerlyTwitter0 Ads
• LinkedIn Ads

The disadvantage of paid traffic is that as soon as you stop paying, your traffic will stop and you won’t get any new leads.

“Free” traffic is the one you don’t pay for directly, however, this doesn’t mean it’s truly free. You might need to spend money on paid tools and work really hard to optimize your site for Google and earn the attention of others so they start talking about you.

Free traffic methods include:

• SEO
• Social media traffic (non-paid)
• Referral traffic (from other sites linking to you)
• Direct traffic (from people who know about your brand and have visited your website before).

Engagement Strategies

You need to constantly engage your leads, educate them on topics they are interested in and help them move down your pipeline. That way, at some point, they will be ready to make a purchasing decision.

As we’ve already covered, you can engage them with:

• Blog posts
• Videos
• Podcasts
• Social media posts
• Facebook live
• Webinars.

Conversion

These are strategies that you can use to convert your prospects into customers. Here,  you can use:

• Sales calls and sales emails
• Webinars
• Sales and product pages.

What’s important is to build the demand for your service in advance and turn their implied needs into explicit needs. Then you can make a clear offer that targets the needs of your customers and closes the deal. It’s important to explain to the user what they need to do in order to buy from you.

It can take time to develop the perfect sales funnel for you business and it will always need tweaking but it is a very worthwhile effort!