Complete Guide to Sales Funnel and How to Build One

Martin Zhel
Martin Zhel

Last updated on

October 24, 2021

Ever wondered about the journey your customers are going through before they end up making a purchase from your business? 

The journey — mapped by a sales funnel — outlines all the checkpoints at which your customers will interact with you before they are ready to make a purchase. In order to build a successful sales strategy, your sales funnel has to be top-notch. 

Your primary goal with your sales funnel is to move people from one stage to another until they are ready to purchase. 

I talk about everything sales funnel in this article — what is it, how to build one, and what kind of content you would require for each step of your funnel. 

For a sales funnel to work, you need the perfect platform to execute your strategies. With Mailmunch’s comprehensive lead generation and email marketing suite, you get everything you need to capture leads, nurture them, and convert them into paying customers.

What is a Sales Funnel?

A sales funnel is a marketing concept that maps out the journey a customer goes through when making any kind of purchase. The model uses a funnel as an analogy because a large number of potential customers may begin at the top end of the sales process. Still, only a fraction of these people actually end up making a purchase. There are multiple sales to a sales funnel, usually called as the top, middle, and bottom of the funnel, depending on a company’s sales model. 

As prospects pass through each stage of the funnel, they signify a more profound commitment to the purchase goal. Most businesses, whether online or conventional, use this model to guide their B2C marketing efforts in each stage of the sales funnel.

The four basic Sales Funnel stages are:

  • Awareness
  • Interest
  • Decision
  • Action

Before discussing these stages, let’s first discuss why we need a sales funnel. 

Need for a Sales Funnel 

If you are a business owner, you know the pain of missing out on sales. After putting out content, lead magnets, webinars, and so much more, prospects drop out of the funnel without purchasing anything. 

It happens. But it happens less if you have created a proper sales funnel. A sales funnel helps you understand your potential customers and what they are thinking, doing, and looking for at each stage of their journey. With these insights, you can invest in the right marketing activities and channels to create the most relevant and engaging messaging during each stage and turn more prospects into paying customers. 

Understanding the Sales Funnel Stages

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.

Before you start building your sales funnel, it is essential for you 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 add as many stages within your sales funnel as you want. In general, there are four stages of a sales funnel. 

Stages of a Sales Funnel 

As discussed above, the four main stages of a sales funnel are: 

  1. Awareness
  2. Interest
  3. Decision
  4. Action

Awareness

This is the first stage and is called the “awareness” stage because it’s where people first become aware of your solution, service, or product. 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 hear about you for the first time, through an ad, Google search, a post shared on social media, word of mouth, or another traffic source.

One example of the awareness stage is when a prospect learns about your company for the first time. Perhaps they stumbled on one of your ads, read your blogs, found your website through Google search, or heard a colleague talking about your product or service. 

Interest

Once a prospect has learned about your brand, they will evaluate it based on the level of interest and the solutions you provide. 

At the “Interest” stage, the prospect is actively looking for solutions to their problems and ways to achieve their goals. They search for solutions on Google. They’ll think about the problem they’re trying to solve and conduct competitive research to make sure your offering is the best solution. 

Decision

Now that the prospect knows about your company and the solutions it provides for the prospect’s pain points, they will dig in deeper. The prospect will find information like pricing and packaging options. Sales pages, webinars, and calls are very helpful in this stage to help the prospects make a decision.

Action

The most important stage of the funnel — whether the prospect makes a purchase or not. If they don’t buy from you now, that doesn’t mean the deal is lost forever. You can create nurture campaigns to make sure you stay on top of their mind for any future needs.

Customer Retention — Important Part of Sales Funnel 

When you have your customer on board with your company, it is important that you do everything to retain them. This stage requires you to focus on keeping customers happy in order 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 their pain points. 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

Examples of a Sales Funnel 

Let’s take a sales funnel example that you own an online book shop. You know that your target audience is mostly on Facebook; they are mostly males and females between the ages of 20 to 50. 

You build a landing page with a form for prospects to sign up with their emails in exchange for a lead magnet. In this case, the lead magnet is the first ten pages of a new novel that’s just launched. 

You run an ad on your Facebook page that drives traffic to your landing page. Prospects add their email addresses and download the lead magnet. Now you have leads instead of prospects. They are moving through the funnel.

What you will do now is nurture the leads. You can send out educational content related to books, or share the new books that will be coming soon to your book shop, or DIY tips to build a bookshelf. All these email drips will be focused on educating your audience. 


At the end of this drip campaign, you offer a 10% discount coupon on the first order to your entire list. Now you are selling your books like crazy, and your prospects are converting into customers. 

You continue sending educational content to your email list. Give them ideas for bookshelves, how to take care of their books, or suggest different books as gifts. With this content, you are asking them to come back for more. 

There you have it — a perfect sales funnel, leading prospects through the funnel and converting them into paying customers. 

To summarize, this sales funnel has four stages as follows: 

  • Awareness: You created a Facebook ad to lead people to your landing page.
  • Interest: You offer something of value in exchange for lead capture (email addresses).
  • Decision: Your content educates your audience and prepares them for a purchase.
  • Action: You offer a coupon your leads can’t resist, then begin marketing to them again to boost retention.

How to build a sales funnel for your business 

For a properly built sales funnel to exist, you first need potential customers who can move through that funnel. Once you have those prospects, you can track behavior and engagement using lead scoring to identify where they are in the funnel.

Let’s delve into the steps to help you create a sales funnel:

1. Gather Data and Understand Your Customers

The best way to understand your audience is by talking to them. The more data you gather about your audience, the more effective your sales funnel will become. 

One important thing to remember is — you aren’t marketing your business to everyone. You are marketing it to people who are a good fit for what you sell.  

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 your data, you can create content for each stage of your sales funnel and help prospects move down your pipeline.

2. Capture Your Audience’s Attention

The only way your sales funnel works is if you can lure prospects into it. Without prospects and people interested in your business, there is no sales funnel. This means putting your content in front of your target audience.

First, you should take the organic route and post a lot of diverse content across all of your platforms. Branch out with different content forms like infographics, videos, social media content, and other types of content. Organic traffic includes: 

  • 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)

You can add forms and popups to your website to capture leads. You can also run a few ads or do prospecting manually. The ideal place to run such campaigns depends on where your target audience hangs out. If you’re selling B2B, LinkedIn prospecting or LinkedIn ads might be the perfect solution.

3. Build a landing page

Your ad and other content need to take your prospects somewhere. This is where a landing page with a cant-miss offer comes in. 

If they click on an ad, sign up for a webinar, or download an ebook, they’ll go to a landing page. 

Your landing page should communicate who you are as a company and your unique benefits.  Focus on capturing leads instead of pushing sales. This could be the one and only opportunity you have to impress your prospects and capture them. 

Make sure the landing page has a form for prospects to enter their information. You want to capture their email address so you can continue to communicate with them to steer them towards the next step. Your landing page should also have a bold CTA (call to action) that tells them exactly what to do, whether it is downloading a free eBook or reading a blog.

Check out Mailmunch’s free landing page builder. Use 100+ tried and tested templates or start from scratch with the intuitive drag and drop builder to build high-converting landing pages without any coding required.

4. Create an Email Drip Campaign

Now that you have captured leads through the landing page, you need to communicate with them in order to close them. 

Market to your leads through email marketing by providing valuable and engaging content. Send updates regularly, but not too frequently. Maybe one or two emails per week should suffice. It totally depends on your audience and what you have to offer.

Start by educating your prospects first. Send them educational content rather than promotional content. Build up to the sales later. First answer questions like:  

  • What do they want to learn? 
  • What obstacles and objections do you need to overcome to convince them to buy?

At the end of your drip campaign, make an incredible offer they can’t resist. That’s the piece of content that will inspire your leads to act and make a purchase.

With Mailmunch’s advanced email marketing suite , send broadcasts, schedule drip campaigns, and automate emails based on your customer’s behavior.

5. Keep the communication going 

Once your prospects convert into paying customers, you don’t forget about them. Continue to reach out to them. Keep sending them educational content that might be useful to them. Thank them for their purchase and send them regular updates on any promotions or sales. Involve them in your social media strategy and build a community out of your customers to develop brand trust and loyalty.

With Automations in Mailmunch, keep the conversation going with your customers at every stage of the sales funnel.

How to Create Content for Each Stage of The Sales Funnel

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. What they need is a sales strategy for every stage to engage effectively.

That’s why I have decided to explain how you can use different content for each stage of your sales funnel. 

Blogging (Awareness and Interest)

By blogging, you will generate awareness and interest around your business. It can 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)

Any type of lead magnet is used as a tool to generate interest in your product. 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.

Anything that can educate your prospects on how they can solve their problems and achieve their goals is helpful for this stage. Within the lead magnets themselves, you can place call-to-actions to check out your products/services, call your sales department, etc.

Webinars (Decision and Action)

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 growing their traffic, losing weight, or finding the perfect soul mate. 

Your goal with the webinar is not only to educate them but to entice them in order for them to make a decision and buy your solution. 

In 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)

Videos are more impactful for the awareness and interest stage, although they can be a very useful medium for the decision and action stage as well. 

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. You can also create tutorial videos for customer retention by giving customers a detailed tutorial on how to use your products. 

Measuring the Success of a Sales Funnel

Your sales funnel might need tweaks and adjustments as your business grows. With more data about your target audience, you learn more about your customers, and you diversify your products and services.

A great way to measure the success of your sales funnel is to track your conversion rates.

For example, how many people sign up for your email list after clicking on a social media ad? 

Pay careful attention to each stage of the sales funnel:

  • Are you getting the attention of enough consumers with your educational content?
  • Do your prospects trust you enough to enter their contact information?
  • Have you secured purchases from your email drip campaign and other marketing efforts?
  • Do existing customers come back and buy from you again? 

By answering these questions, you will know where you need to change your sales funnel accordingly.

Optimizing Your Sales Funnel

How do you market your products and services to your prospects without shoving them into their faces? Well, you have to market efficiently. You can’t force them to make a purchase, and neither can you stop them from going to your competitors.  

Without a properly optimized sales funnel, you are just guessing about your prospects’ journey and what they want. If your guess is wrong, you lose the sale. And that’s a risk you really shouldn’t take. 

Take a note of how people engage with your site during a session. Where do they click? Does anything seem to confuse them? Are they focusing their attention where you want?

This is particularly important for those landing pages you are diverting them to. If the landing pages are not optimized for conversions, most people will just click away. 

How to Optimize Your Sales Funnel

You can optimize your sales funnel in different ways. The most important places to put your focus on are the areas when consumers move to the next point in the funnel.

We have discussed social media advertising. Don’t just run one ad; run ten or twenty. Direct them to different buyer personas and different target audiences. Use the targeting features to make sure those ads appear in front of a diverse group of your target audience. 

Most importantly, A/B test your landing pages. It takes time, but you’ll reach more people and convert prospects more reliably.

You should also A/B test your drip campaigns. Change your subject lines, imagery, offers, CTAs, and layouts to figure out what your audience responds to.

The best way to optimize your sales funnel, though, is to pay attention to the results.

Top of the funnel 

At this stage, all your content is about letting your prospects know your brand exists and encouraging them to click on your CTA. If your content isn’t working, try something else. Keep experimenting. 

Landing page 

Make sure the offer and CTA are relevant to the content in your blog post or social media ad, or whatever other asset you used to drive traffic on the landing page. Test your headline, body copy, images, and CTA to find out what works best to optimize your landing page.

Your Offer 

When you ask people to buy from you, A/B test your offer. Does free shipping work better, or are people more interested in a 5% discount? These little things on an offer can make a huge difference in your revenue.

Customer Retention Rate

Track your customer retention rate. Do people come back and buy from you a second, fourth, and fifteenth time? Do they refer their friends? Are they talking about their brand in a positive manner? 

The goal of your entire sales funnel is to keep your brand on top of the mind of your customers. If you don’t disappoint your customers at any stage of the funnel, they won’t find any reason to look elsewhere for their problems. 

Principles of Persuasion for Effective Sales Funnel

Dr. Robert Cialdini, a marketing and psychology professor, introduced 6 principles of persuasion in his 1984 book Influence. These are:

  • Reciprocity
  • Consistency
  • Social Proof
  • Liking
  • Authority
  • Scarcity

Here is how they work, according to psychologist Dr. Kendrick:

In brief, we are inclined to go along with someone’s suggestion if we think that person is a credible expert (authority), if we regard him or her as a trusted friend (liking), if we feel we owe them one (reciprocity), or if doing so will be consistent with our beliefs or prior commitments (consistency). We are also inclined to make choices that we think are popular (consensus [social proof]), and that will net us a scarce commodity (scarcity).

You can use the tools and strategies mentioned in this article to further push prospects along each stage of your sales funnel. For example:

  • You can create awareness by giving out freebies (guides, checklists, pdfs) using the principle of reciprocity and consistency. Regularly blogging or posting on social media shows consistency and also establishes your presence (awareness).
  • You can capture interest using principles of liking and scarcity. People will be more interested in what you have to say if they either like you or if they believe you are offering a limited commodity.
  • You can guide prospects in the decision stage if they believe you have authority in your domain and so will be more likely to listen to you. You can build authority using case studies, webinars, and tutorials.
  • You have a higher chance of closing a sale in the action stage if you use the principle of social proof. You can give social proof by showcasing reviews, recommendations, testimonials, and favorable PR.

Benefits of Creating a Sales Funnel 

A properly built sales funnel provides huge benefits to your business by leading your prospects through the funnel effectively. Let us have a look at some of the benefits of a sales funnel. 

The right message at the right time 

With a proper sales funnel in place, including a map of prospect’s questions and the details they need, you can deliver the right information and an aligned message to your prospects every single time — and save your future customer from any frustrations. 

Alignment between marketing and sales

Your prospect can get in touch with you at any moment of their customer journey, whether it’s early research or late decision stage. So it’s important to align your marketing and sales efforts so that they receive the information they need even when you don’t have the ability to deliver it directly as a sales person. With a proper sales funnel in place, you can deliver the proper offer to your prospects outside of your sales conversations. 

Saves time and efforts 

Having a solid funnel in place will allow you to dismiss bad leads early and increase your efforts with highly qualified ones — ultimately resulting in more sales and better customers. 

Conclusion

Your work is not done when you create your sales funnel. In fact, this is where it all begins.

It's important to measure your results once everything is set up. Choose your KPIs first, then set up a measurement program. Take time to build out a sales funnel that represents what you want and what your audience wants.  

Optimize it over time, adjust your approach to various sales funnel stages, and find out why your efforts aren’t working.

Gather data around, analyze, and improve your funnel if you want to get better results. Figure out where your strengths and weaknesses lie. Such questions will help you figure out where you need to work on your sales funnel. And then focus your resources there.

A good flow of people right from the top all the way to the action stage will ensure you have a healthy business.

Your sales funnel can't be perfect until you have the right tool to execute your marketing strategy. With Mailmunch, you get an all-in-one lead generation and email marketing tool — helping you capture leads, nurture them, and convert them into paying customers.

So, what are you waiting for?


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