How to Build a Sales Funnel: A Step-by-Step Guide

Sales funnels are found everywhere; however, few marketers and business people understand how they function. Also, some people use outdated sales funnel models where the actual sales occupy most of the funnel.

The times have changed. It is harder to convert prospects to paying customers; due to the fierce competition and an endless number of small businesses and start-ups coming up each day.

A study conducted by HubSpot showed that 37% of marketers report that prospecting is the hardest part of their work. Also, another research conducted by Salesforce shows that 68% of companies do not measure their sales funnels properly, and 79% of marketing leads are not converted into sales.

In this article, we will show you the steps that will assist you in creating a high-converting sales funnel.

What is A Sales Funnel?

A sales funnel can be described as a step-by-step process of breaking down the customers’ journey all the way from the ‘awareness’ stage (when they first know about your business) to the ‘purchase’ stage (when they are ready to buy your product or service) through a series of marketing channels. Also, the funnel involves post-purchase follow-ups that increase retention with cross sells and upsells.

A sales funnel can be referred to as the path of your customers’ journey, all the way from interested prospect to converted customer.

Sales funnel is a standard process of making sales and is composed of several actions that consumers go through to buy products and services.

From the definition, we can establish that:

  • It is a step-by-step process (It occurs in stages)
  • The purpose of a sales funnel is to convert prospects and potential customers into customers.
  • It represents or maps out the customers’ journey from awareness to purchase.
  • The process is accomplished through a series of marketing processes or channels such as content marketing, email marketing, among others.

How Does A Sales Funnel Work?

Every business has a sales funnel because every business seeks to convert visitors into leads and leads into paying customers. The sales funnel can also be used in almost any business and any industry.

Let us see an example: For you, the sales funnel for Starbucks might begin when you view their advertisement. You might see a Starbucks billboard on your way to work. This makes you come into awareness of their brand.

Later you might see a Starbucks commercial on the television, and in the process, observe people enjoy the coffee and become more productive. Now, you are interested in coffee. You desire to become more productive at work, and you want this coffee that makes people productive.

The next day, on your way to work, you come across a Starbucks, and someone gives you a flyer advertising a ‘buy one, get one free coffee promo.

You finally decide to go in and order Starbucks coffee for the first time. You are offered the option of choosing a cookie with your order, and you decided to take it.

They finally sell you your cookie and two cups of coffee.

This is a classic example of a sales funnel. The journey started from you being a prospect, then to getting interested in the brand and finally becoming a paying customer.

Even though you do not realize it, you are buying products or services due to sales funnels. Sales funnels can be used to sell everything, including physical commodities, information products and services.

Importance of A Sales Funnel

High converting sales funnels solves the most significant challenge that some companies have, and that is creating a system to get profitable customers. The soul of a business is sales, and any business that does not record transactions is on its way to extinction. 

Therefore, it is expedient that every business has a system that helps them to acquire profitable customers. The sales funnel meets this challenge. It helps a company or an undertaking to get valuable customers at scale. With high converting sales funnel, acquiring and keeping profitable customers is more straightforward and effective.

A high converting sales funnel can convert prospects into paying customers. If you desire to transform your prospects into paying customers, you need a high converting sales funnel. Your prospects are people that are interested in your brand and your business but are not necessarily your customers. They are people that you advertise to and speak to concerning your company. Still, they have not decided to become customers. A high converting sales funnel can be handy in converting your prospects into paying customers.

A high converting sales funnel can help you to get repeat business by selling more products or services to existing customers. Your sales do not stop with converting your prospects to paying customers. You should go-ahead to sell more products or services to existing customers. Through a high converting sales funnel, you can get repeat business and upsell to your existing customers.

A high converting sales funnel ensures that your profit and revenue are consistent and predictable. When you have a high converting sales funnel, your business can generate profit that is consistent and predictable. When you master the art of making a high converting sales funnel, you are giving predictability and consistency to your income and profit.

A high converting sales funnel can enable you to measure the daily, weekly and monthly performance of your business. You can become aware of the performance of your business over time with a high converting sales funnel by analyzing your performance dashboard and analytics. This way, you can know the level of your conversion, the working strategies and those that are not. This way, you can improve your sales strategies.

A high converting sales funnel can enable you to communicate effectively with your team and reach better decisions. From your performance dashboards and analytics, you can communicate effectively with your team and make better decisions on how to do better.

The importance of a high converting sales funnel cannot be overemphasized. It is all-encompassing in every stage of your sale. From getting prospects to converting them to paying customers and then to sell to current customers, a high converting sales funnel has great importance.

Key Takeaways

  • High converting sales funnels solve the most significant challenge that some companies have, and that is creating a system to get profitable customers
  • A high converting sales funnel can help to convert prospects into paying customers
  • A high converting sales funnel will help you to get repeat business by selling more products or services to existing customers
  • A high converting sales funnel ensures that your profit and revenue are consistent and predictable
  • A high converting sales funnel can help you to measure the daily, weekly and monthly performance of your business
  • A high converting sales funnel can help you to communicate effectively with your team and reach better decisions.

4 Stages of the Sales Funnel

The sale funnel has 4 primary stages, and they are:

  • Awareness 
  • Interest 
  • Decision 
  • Action

Other stages are also included, such as:

  • Retention 
  • Upsell

The term, sales funnel shows that a larger number of prospects may start at the beginning. However, only a part of them make purchases.

When the candidate moves through the funnel, that shows a greater desire to make a purchase. Each of the stages of the funnel moves your most qualified prospects into the next step and drops those that are not a fit for your offers.

1. Awareness

This is the top of the sales funnel. Hence, you should avoid talking too much about your product. If you do that, rather than attract them, it will push them away.

This stage is perfect for giving your prospects valuable information about your industry that they can use now.

Your primary goal in this stage is to make people aware that your business exists.

The question you have to ask yourself is: ‘How can I make more people aware of my products and services? ’

You have to showcase your expertise so that you are seen as a thought leader in your industry. This will help to build a strong relationship with your prospective customers.

Here are some of the ways to increase your brand awareness:

  • Content Marketing: This is one significant way of building your audience and creating your brand awareness. It involves writing valuable and relevant articles that will increase traffic to your website and social media, and also make you seen as the expert in your business or field of interest.
  • Video: Another great tool for building awareness is video. One great advantage of videos is their ability to allow your target audience to see you and get connected with you. You can also use videos to show a product and give out other ideas.
  • Paid Ads: Advertising is another great tool for reaching your prospects quicker. They let you target people through preferences or through demographics (age, sex, location, among others).
  • Blogging: Blogging is an excellent way of creating awareness in your solution. Blogging can serve as a medium for engaging your list by giving out valuable content. You can create awareness through blogging by optimizing your content using the appropriate keywords. This way, you will draw your target audience through organic searches. This is termed Search Engine Optimization (SEO).
  • Word of Mouth and Referrals: This method can be useful if your products and services are excellent. However, do not bank on it alone. Ensure that you create a solid sales funnel that guarantees massive results and revenue.

2. Interest

After creating awareness of your brand, the next step is to establish their interest in you and in your business. For this stage, you have to build trust and authority. This will make your prospects feel comfortable buying from you. 

At this stage, your prospect actively shows interest in your products and services. Here, they are actively looking for solutions to their problems. You can then ‘hook’ them with great content, then they can follow you on social media or subscribe to your list.

You can capture interest with principles of liking and scarcity. You will get more people interested in what you have to say if they like you or if they think that you are offering a limited commodity.

Here are some of the ways you can establish interest:

  • Email Marketing: This is one of the popular choices for most online marketers because it is relatively cheap. As soon as a person gets into your email list, you will keep reaching them via emails.
  • Videos: Beyond raising awareness, videos are useful in several ways to establish interest in the hearts of the prospect. You can also use YouTube to create interest in your business.
  • Blog Posts: This is another way of establishing interest in a business. Through this means, prospects can learn about how your business can help them
  • Webinars: You can organize free webinars to teach your prospects and establish a relationship with them. This will go a long way to develop trust from them.

3. Decision

The next stage is the decision stage. At this stage, the prospects decide to take your offer or purchase your products or services.

Here, the prospects pay more attention to what you offer, such as different packages and options. Then, they can reach their final decision to buy your products and services.

Getting prospects to make a decision is not easy. You have to present them with a great opportunity.

Robert Cialdini stated 6 principles in his book, Influence, that moves prospects through this stage. They include:

  • Principle of Reciprocity: This is accomplished by giving lots of value, either through freebies, led magnets in the beginning, or ongoing exchanging through your emails.
  • Principle of Commitment and Consistency: When you get people to commit to something, they will buy from you. That is the reason for getting them to agree to something like a free + shipping offer or by consenting with something you have said in some way. It is a powerful principle in sales and used by some of the best marketers in the world. They often try to get your commitment to something.
  • Principle of Liking: People will buy from you when they like you. You have to craft your story in a way that it will make your prospects decide to buy from you.
  • Principle of Authority: Here, you answer the questions: How much authority do your products or services have? Do the respected people in your community or niche endorse them? Are there any scientific studies backing it? Are you an authority? These elements are essential in this process.
  • Principle of Social Proof: This talks about your past results. Do you have previous records of success? Are there people on social media talking about how great your products or services are? Do you have any other kind of social proof? Best-selling books? You must show these to your prospects.
  • Principle of Scarcity: This talks about injecting some sense of scarcity in your offers. When you apply the principle of scarcity in your proposals, people will be persuaded to act. Such scarcity includes a limited amount of some offer, time left before the expiration of a discount or the slots that are available for your online class.

4. Action

Most times, this stage is the purchase. Your conversion rate is predicated by how well you can move them from the awareness rate to the decision stage. For instance, if 200 people click on your offer and 20 people enter your sales funnel. Still, only 2 people make a purchase, then you have a 2% conversion.

How to Build A Sales Funnel in 13 Steps

Creating a sales funnel will help you move prospects from initial contact to sale. At each stage, you can track the prospect’s behavior and engagement to determine where they are in the sales funnel.

The process of creating a sales funnel varies from business to business and industry to industry. Here are the steps you can follow to create a sales funnel for your business:

1. Understand your Target Customer

The first step in creating a high- converting sales funnel is that you have to understand your target customer. However, you will need to pin down the specific questions that you require answers to.

These are some of the questions to ask yourself: Who is my audience?

Here, you want to know their demographics like gender, age, location, education.

You will also need to know your customers’ psychographics. This is a study of the customers’ attitudes, aspirations, and other psychological criteria.

Where are they on social media?

People of different ages use different social media platforms. You have to discover the platform that your audience loves to hang out online and reach them through those channels.

What bothers them?

This is a vital question. You have to realize that this is not about you but about your audience. 

Remember that your prospects are human beings, and your mission is to assist them in solving their problems. This is important in your content marketing strategy.

Knowing your audience well enough will make you:

  • To position your brand uniquely.
  • Find your audience more quickly.
  • Deal with their pain points more effectively.

You have to ask yourself as many questions as you can think of, and the answers will help you to create buyer personas.

2. Create Buyer Personas

After thoroughly researching your prospects, you will discover that all of them are not the same. You will have to categorize or segment them, which is a more popular term.

Based on the information you gathered during your research, you need to create different buyer personas.

You will need to ask yourself more questions:

Why do they want to buy your product or service? What motivates them to buy your product/service? How are they going to use it?

When you answer these questions, it will help you personalize your approach and enhance each customer’s individual experience by categorizing them as a specific buyer persona.

3. Set Your Goals

After categorizing your buyer’s persona, the next step is to set your sales goals. You desire to make more sales but also think of ways to create a positive brand experience.

The question to ask here is: What is our goal for this service, and how does it benefit our customers?

4. Find the Right Channels

Here, you have to find the right channels to get your audience from. Where can the audience that you defined in step 1 be found?

Some of the channels that you need to consider are:

  • Social channels that they talk on both work and leisure (Get a list of them and tick)
  • Blogs that they read and enjoy.
  • Websites they visit.
  • Search channels that they use such as Bing and Pinterest.
  • What brands they follow and what these brands are saying to them. Who their influencers are, and how often they follow them on channels.

The question to ask: Where are my audience hanging out online?

5. Use the Right Channels

After discovering the channels that are most appropriate for reaching out to your target audience, the next step is to choose the channels to use.

Here are some of the channels:

  • Email
  • Text
  • Video
  • Blogging
  • Social Media
  • Paid Ads
  • Promoted posts Messaging
  • SEO, among others.

There is no one answer that fits all approaches for this. You have to discover where your target audience is and the preferred medium of receiving information.

This is an essential step in succeeding with your funnel. Therefore, you have to consider it critically. You could use social media to build an audience if you do not have the budget to get visitors to your site. You can also start a blog or work on basic SEO. You can also go for paid ads for quicker results.

The question to answer here is: what channels are we using to communicate with our target audience?

6. Give out Relevant and Valuable Content

It is imperative to make an excellent first impression online as well as offline. Hence, you have to think about the free content that you are going to offer your target audience. Begin by providing your audience with the very best thing you have for free, and ensure that it should be related to what you are selling. This step takes people from being visitors to becoming leads. Therefore, you have to be serious about it.

Some of the content that you can give here is impulse type information. Examples include a cheat sheet, a list of tools, a free template, an easy step by step guide, a mini-course or a report. However, they need to be relevant and valuable. They need to be relevant to your target audience, and they also need to be valuable.

Creating valuable content is not an easy task. However, you need to put yourself in the shoes of the target audience. Think of Frequently Asked Questions (FAQs), ask sales what customers need, brainstorm with the team, think of the biggest challenges that your customers have and how to solve them.

Also, your content should be about your target audience and not about you. Quit talking about yourself and begin to talk about your customer’s problems and the outcome that they seek. 

This is the rule for all the steps from the top to the sales funnel press activities to the bottom of funnel closing efforts. Become an expert on the pains of your customers first, and it naturally follows that you will know how to tackle them to get them to where they desire to be.

The question to answer here is: What great piece of free, valuable content can we give away?

7. Start Getting Leads

After creating your free content, the next step is to attract people to it so that you can start giving it away.

How?

You have to give it away in exchange for an email address and a name after you have created your content, and you have selected your channel.

One of the best ways to do this is to set up a landing page. You can use WordPress for free or tools like LeadPages or even ClickFunnels.

These tools provide the template to build from, and they make it easier because all you have to do is add content.

Your lead magnet has to really connect with your target audience. It also needs to be attractive to give your audience value and a quick win.

The role of your lead magnet is to grab their attention and bring them into your funnel. Therefore, you have to really think about how to solve their problems, give them a quick win, and that lead magnet must be related to your offer. 

Therefore, your lead magnet needs to be an accurate reflection of what you are offering your target audience at the end of the funnel. 

Otherwise, your audience will get lost in the funnel, and they will not convert to customers.

Here are different types of content that serve as great opt-in offers used as a lead magnet:

  • Checklists 
  • Case Studies 
  • Roadmaps 
  • Recipes 
  • Whitepapers 
  • Mini-courses 
  • Reports
  • Free + Shipping offers 
  • Cheat-Sheets
  • Guides
  • Email Newsletter

The question to ask here is: what landing page do we use to create our first lead capture page?

8. Set up an Email Autoresponder to Nurture Leads

After your target audience has downloaded your free valuable content, you will start the process of telling them what to expect from you. You can also tell them a little more about your brand, the vision and begin nurturing them and putting the next offer in front of prospects.

You will have to plan the emails, and then get them arranged using an autoresponder sequence. It is imperative to get this right so that you will not spend your whole day manually sending out emails when you start getting leads. You can start with Free tools like MailChimp, Aweber, Active Campaign. These tools help you to set up an essential series of emails that are sent to everyone that downloads your content.

The emails you send do not have to be over complicated to start.

You can send the first mail to say hello and welcome. Then in the second Email, you post information on what to expect from you and the value you give and the difference that it will make in the lives of your target audience.

The task here is to choose the autoresponder to use and write the first two emails.

9. Prepare an Upsell or Tripwire

You can now proceed to send them the type of content that will make them consider buying from you. This is after you have succeeded in getting the attention of your prospects with your enticing awareness oriented emails.

Your prospects will be interested in your offer if you have done a great job in creating valuable awareness content. They will begin to demand additional information concerning your product and service. Therefore, you have to give them what they need.

This is where you take the step of converting your prospect to a paying customer. To turn your leads to sales, you will have to combine the features and the benefits of your products and service and ensure that your content is convincing enough. Here, you will not only give your prospects the reason to purchase your product, but you also need to create a sense of urgency in them. You can do so by informing them of the need to make a paying decision now. You can use a bonus or a discount to persuade them to make a purchase.

However, you have to note that it does not make a big purchase to convert a prospect to a paying customer. A small purchase changes the psychology of the relationship. 

Therefore, at this point, you can make them take an incremental step of a high-value offer at a low price of $5 to $50, depending on your product.

Here you ask to answer the question: What can I offer to convert leads to customers?

10. Make your Core Offer

Here, your prospects have gone through a few stages of the funnel, they have received a few emails, they have paid for something, or made a big-time commitment. Now, you have to make them an offer.

Here, you may go further to want them to book a call or buy a ticket for an upcoming event that you are running where you can get in front of them. Remember that even though they are  interested in your brand and have invested, it might not be the right time for them to buy.

Keep nurturing them, share valuable tips and invite them for offline and online events. You can make them a core offer with a series of 3 -7 well-designed emails that will land in their inbox over a few weeks. Those emails should be designed to help people buy, so think about responding to their likely concerns and share testimonials.

11. Create Repeat Purchases

Getting sales is usually regarded as the most challenging part. Hence, as soon as you get the most-needed conversion, you might decide to rest on your oars. 

Nevertheless, because you desire that your customers will make a repeat purchase from you, you should not stop at sales. You should focus on cultivating your relationship with your customers by assisting them in getting the best of the goods and services that they have purchased. You have to send them supportive content. This will help them to know that they transacted with the appropriate brand. 

Also, you can follow them up with supportive content such as simple tips even to a full video on how to use your product and service. That will help them to become devoted to your brand.

This step ensures that your customer buys from you again; instead of feeling buyer’s remorse.

Also, you have to realize that the percentage of your prospects will be keen and able to buy other services or products that you offer. 

Therefore, you must map out each product or service and understand if any of them would be an excellent offer to make for your customers. You also need to understand your customers, their challenges and how your service or product will help to solve the problems. Here, you will record real revenue growth by being able to sell multiple products to your customers.

Here are some of the products that you can give existing customers to help them apart from your leading offers:

  • Continued support or maintenance.
  • Dedicated customer service or a key account manager. 
  • Premium version of your product
  • Online training and development courses
  • Access to a VIP Club or membership site.
  • Monthly subscription.

12. Get Referrals from Your Customers

Here, you seek to transform your customers into brand evangelists. They can do that by leaving positive reviews, giving raving testimonials, case studies and referring friends.

The ability to convert your email subscribers to paying customers is an indication that your email campaign was successful. Nevertheless, if you can make your customers advertise your product and service, that is a sign of great success for your email campaign. When you genuinely amaze your customers with your services and product after they have purchased them, they will convert into strong advocates for your business.

One way that you can get your customers to become advocates of your brand is to do excellent work. You can do that by delivering more than expected value in all the stages of your sales funnel.

Social influence gives you brand more points, and makes you outstanding before your customers. Therefore, when satisfied customers give positive reviews on your product or endorse them to their friends or colleagues, that means that your product was effective on them.

These are ways to enhance the possibility of turning your customers to brand advocates:

  • Give perks or bonuses to your customers from time to time.
  • Monitor your regular customers who buy from you over and over again. Use some incentives to make them purchase other products from you.
  • Give constant value to them by free but valuable means such as a newsletter.

However, you can seek out referrals, reviews and testimonials. This can be achieved by sending out an email as soon as your client makes use of your product or service.

13. Retargeting

You should use tracking software to monitor every sale funnel stage and analyze the level of engagement of your prospects in each of the phases.

Then, you can launch automation software and triggers that can engage those that did not convert after some time.

In a case where you give an offer that expires within 48 hours, you need to have an automation set-up that will retarget the non-responders with another lower- priced offer that will re-engage them.

Sales funnel FAQs

How is a sales funnel different from a marketing funnel?

A sales funnel guides a prospective customer from the marketing stage to conversion. By contrast, a marketing funnel describes the process of converting a lead or prospective into a customer. 

What is the difference between a sales pipeline and a sales funnel?

A sales pipeline describes how a prospect becomes a customer from a lead. Each step leads to the prospect becoming a customer. There are the same stages in the sales pipeline and the sales funnel, but they are represented differently. Sales pipelines explain the value, quantity, and stage of each deal at a given time, whereas sales funnels explain the number of deals and what percentage have passed through each stage of the sales process.

What is a sales funnel manager?

The sales funnel management process involves managing each prospective customer’s journey through the sales process. The most effective sales teams align their sales process with the buyer’s journey and manage their pipelines and sales funnels in accordance with best practices.

With CRM software, you can automate and streamline the process of managing the sales funnel, including qualifying leads, tracking prospects’ activity at each stage, and following up automatically when the time is right. It can also be used to define sales processes, identify leaks in sales funnels, and streamline conversions so prospects reach the bottom of the funnel sooner.

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