What is a Sales Funnel and How Does it Work Exactly?
This article is about a sales funnel – a marketing model that helps you plan and keep track of your sales & marketing processes in order to maximize sales and revenue. Read on to learn what a sales funnel is, how it works and how to create one yourself.
What is a sales funnel?
A sales funnel is a visual description of your sales process. It allows you to determine and reflect on the actions your customers take at every stage of the buying cycle. With the help of a sales funnel you can design a great customer experience along the customer journey.
The idea of a sales funnel dates back to 1898 when E. St. Elmo Lewis developed a purchase funnel or purchasing funnel – a marketing model which illustrates the theoretical customer journey from the moment of attracting customers towards the purchase of a product or service.
Since then, it’s been given different names (i.e. purchase funnel, sales funnel, marketing funnel, conversion funnel) but the model stays the same, which means that it’s:
- universal: it can be applied to virtually any business in any industry
- timeless: times change but the idea stays relevant
In ecommerce, for example, we use the term conversion funnel to describe the customer journey from the awareness stage (usually by driving traffic to a website through paid advertising in search engines and social media) to the conversion stage, when a website visitor becomes a customer.
You might also call it a business funnel, since it allows you to plan all your sales and marketing initiatives and communication for your business model.
Whether you sell a physical product, an ebook, or an online course a sales funnel allows you to create a clear roadmap to revenue. It helps you focus on the most important areas of the online business:
- lead generation
- lead nurturing
- and customer satisfaction
Use the sales funnel to plan sales & marketing campaigns, find areas for improvement, and increase revenue.
To explore this topic further, consider reading our complete guide to funnel marketing.
How does a sales funnel work?
The sales funnel provides canvas for describing and optimizing your sales process so that you get more business.
The model presents the customer journey as a series of stages from awareness to the moment of purchase. You can drive more sales by planning your marketing communication along the stages.
What are the stages of a sales funnel?
The original purchase funnel describes 4 cognitive stages a customer goes through during the buying process for a product or service: Awareness, Interest, Desire, and Action. This model is often referred to as the AIDA model.
When you make potential customers aware of your product or service.
At this stage your key goal is to reach your target audience. Especially people who haven’t heard about your business yet, but they can benefit from using your product or service.
The tools people typically used at this stage are:
- Landing page
A landing page is a simple website designed to help you achieve a clear goal like adding new contacts to your email list or selling a product. A landing page should contain most important information and key benefits of using your product or service. There should be a clear call to action for people who become interested and want to learn more.
A landing page designed to invite people to join your contact list is also called a signup page or a squeeze page and is one of your most important list-building assets.
If you wish to learn more about using these types of pages in your lead gen campaigns, here’s our beginner’s guide to squeeze pages, which also includes great examples and tips.
- Sign up form
The basic tool for turning website visitors into email subscribers. There are different signup forms for different needs, e.g. embedded, pop ups, or lightboxes. In terms of the sales funnel a sign up form is a portal from the awareness in the interest stage. People can express their interest in your offer by signing up to your email communication.
- Facebook and Instagram Ads
You can set up targeted Facebook and Instagram ads and reach new audiences.
If you have a well-segmented contact list, you can use the email addresses of your current customers to create a lookalike audience – Facebook users sharing similar characteristics with the people in your contact list. This way you’ll be able to use the Facebook algorithm to find people who are most likely to become your customers.
You can learn more about other useful targeting options and ad design best practices in our Facebook advertising tutorial.
- Google Ads
Using Google Search ads you can reach people who are actively looking for a solution your product or service could help with.
Identify the terms your target audience would be likely to type in when searching on Google and show them your offer. You can also narrow down the targeting by providing negative keywords, i.e. ones that aren’t relevant to what you’re offering.
Here’s more on how you can create Google Search Ads in GetResponse and how to do it effectively.
- Lead magnet funnel
A lead magnet funnel is an automated way to generate leads for your business. It allows you to set up a campaign that consists of paid ads promoting a landing page offering a relevant signup incentive, follow-up email series, and analytics that show you key statistics in real-time.
While you can create these types of funnels with various tools, this particular visual comes from the lead magnet funnel tool available in GetResponse.
When some people actively express an interest in what you have to offer.
At this stage your job is to provide your audience with all the crucial information about your product or service. They need to know if and how they can benefit from your offer.
By observing contact activity, you’ll see who is and who is not engaged in the communication. You’ll be able to see what information they find most valuable and segment your contact list accordingly. Through segmentation you’ll send much more relevant communication.
The tools people typically used at this stage are:
- Engagement score
The contact card presents all your contact information. One of the pieces of information you mind find particularly useful is the engagement score – a tool that identifies and scores the activity of your contacts based on their interactions with your emails.
After creating engagement-based segments, you can start using them to send better-targeted emails. You can decide whether to win-back your contact’s interest or just maintain their high engagement.
- Marketing automation
You can use marketing automation to create workflows that will automatically send emails and assign tags based on user behavior. You can use tags to determine what kind of content your audience is most interested in.
- Facebook Pixel
The Facebook Pixel allows you to track landing page visitors. You can see what people like and create customized remarketing campaigns based on your landing page visits.
Define custom audiences based on which pages they did or didn’t visit to get the most out of your social ads budget.
If you’re not fully familiar with this concept, here’s our thorough guide on how to use Facebook pixel in your marketing campaigns.
- Email marketing
Plan email series that introduces your brand and clearly presents the benefits of using your products or services. Create content that educates your audience and help new contacts eventually make an informed purchase decision.
Here’s an email drip campaign from LandCafe.pl (ecommerce selling artisan coffee beans) that skillfully guides contacts through the stages of a sales funnel. The campaign is made up of 6 emails that show:
- where the LandCafe.pl coffee comes from
- why you should choose their coffee
- the characteristics of coffee from different parts of the world
- the difference between single origin coffee and a blend
- how to grind coffee and what to use
- how to read the labels of the LandCafe.pl products
- a discount coupon email that triggers sales
View the case study for more details of the email marketing campaign that resulted in 54% sales & check out this guide if you’d like to learn more about email drip campaigns.
- Push notifications
Use push notifications to stay connected with your website visitors. Web push notifications require no email address, so you can deliver quick and hard-to-miss messages to everyone who opts in after visiting your site.
See how to create web push notifications in GetResponse.
Webinars are a great tool interact with your audience. First of all, you can reach out to people who expressed interest in a particular subject and ask them questions that will help you create a webinar they really want.
During the webinar you can use surveys, chat and Q&A mode to engage attendees and discuss topics in real-time.
After the webinar you can send follow-up communication to stay in touch with people who joined you live and send valuable information to those who registered but missed the event.
You can record you webinars and use the recording to create on-demand webinars that people can join whenever they have time. Adding high-quality VOD content to your sales funnel will definitely make it more effective.
In this post, you can find more information on how webinars work and the different type of content you can use in them.
See how Ravenol uses webinars to increase brand awareness and sales.
When your audience knows that your product or service is the perfect fit to their needs.
At this point your audience has all the necessary information about your product or service. They know if it is exactly what they have been looking for. If the answer is yes, they can move on to the next stage.
The tools people typically used at this stage are:
Segment your contact list and group the contacts who have already received all the necessary information to decide if they want to buy your product or service. This is the segment that should be incentivized to take action.
The moment of purchase.
This stage is for people who know that your product or service is what they need. Now it’s time to inform them that there’s no need to wait – the perfect moment to purchase is now.
The tools people typically used at this stage are:
- Sales emails
Send a sales email converting contacts into customers. You can influence sales with early-bird campaigns, flash sales, holiday sales, and discounts. The main goal is to convince your audience that now is the best moment to buy.
- Abandoned cart series
Many people treat the cart as a wish list adding the products they like not to forget about them. They also add products to the cart in order to check the total price and shipping details.
Create an abandoned cart workflow in order to remind them about the products they left behind. For higher conversion, you can plan a series of 3 emails sent after 1 hour, 1 day, and 3 days.
Track your landing page visitors to advertise to them later. Define custom audiences based on which pages they did or didn’t visit to get the most out of your social ads budget.
How to expand the sales funnel?
As your business develops and leans more towards recurring purchases, you can expand your funnel by adding additional stages. The more complex version of the funnel might look like this:
1. Awareness – when potential customers become aware of your product or service (description above).
2. Interest – when they actively express an interest in what you have to offer (description above).
3. EVALUATION – when prospects examine competitors’ solutions and compare their offers against yours.
Provide comparison against your competitors. Not only will you offer the kind of content that your audience is looking for but you’ll also learn a lot about your competitors. The information you collect will help you identify your strengths and weaknesses and position yourself better in the market.
4. Decision – when your offer is shortlisted and it’s time for some negotiation before the final decision is reached (description above).
5. Purchase – the moment of purchase, when a prospect becomes a customer (description above).
6. REEVALUATION – customer has been using your product for a while.
Every now and then your customers will look for other solutions that meet their needs. However, if they’re satisfied with your product and the overall customer experience, they won’t feel the need to research an alternative solution.
You can stay in touch with your customers and proactively seek their opinion by creating a post-purchase follow up workflow. Wait some time and send emails to customers asking them for feedback. This way you’ll create a feedback loop that will help you regularly improve your products and customer experience.
7. REPURCHASE – when a customer repurchases your product or service.
Plan the right moment to remind your customers about your business. Analyze how your customers use your products or services and plan a follow-up communication accordingly.
E.g. if you sell coffee and you observe that your customers typically buy products for a month, you can send a reminder 3 weeks after purchase. If you run a bakery you can send emails more frequently sharing your weekly delivery schedule.
Repurchase might be a perfect stage to try:
Upselling – persuading customers to purchase a more expensive, upgraded, or premium version of the product or service for the purpose of making a larger sale and increasing customer lifetime value (CLV).
Cross-selling – persuading customers to purchase related, supplementary products or services based on the customer’s interest in, or purchase of, one of your company’s products.
This stage can tell you a lot about the general condition of your business. Satisfied customers are ready to buy from you again without the need to research competitors. That is why retaining an existing customer can cost five times less than acquiring a new customer.
By expanding your funnel with post-purchase stages, you can look both at customer acquisition and retention. You have a bigger picture of your business and keep track of all the important metrics.
You should use the individual stages of the funnel as a blueprint for your marketing and sales communication. Monitor the results and optimize your actions to drive more sales in less time.
How do I create a sales funnel?
Creating a sales funnel is easy if you have the right tools. Here’s how you can create sales funnels using GetResponse.
1. Using the conversion funnel
The simplest way to create a sales funnel is to use the GetResponse Conversion Funnel feature. It allows you to promote, sell, and deliver your products online. Here’s how it works:
Create your store (or connect an existing one)
Choose stores and products form the menu. Create your store simply by choosing a name and currency.
Add products to your store
Select the type of product you are going to sell from the available options:
- Downloadable file (like an ebook)
- Online course (like video training or email series)
- Service (like a photoshoot or website design)
- Physical product (like a book or T-shirt)
Create sales funnel
Choose the conversion funnel in the menu and hit the create funnel button. Now you have 2 options to sell your product:
- full sales funnel
The full sales funnel offers you the following tools: signup page, email, sales page, upsell page, and confirmation page. You can also add paid ads on Facebook and Instagram to the top of the funnel in order to reach your target audience.
- quick sales funnel
The quick funnel offers you only the essential tools: sales page, upsell page, and confirmation page. However, you can also add paid ads on Facebook and Instagram to the top of the funnel in order to reach your target audience.
2. Using the integrated online marketing tools
Use the online marketing tools like e.g. email marketing, landing pages, webinars, marketing automation, and paid ads to create a great customer journey.
Here’s an example from Ravenol Polska. The company runs a series of technical webinars for auto mechanics and garage owners. Let’s go through the process and see the tools they used at the particular stages of the sales funnel.
- Email: a promotional email to their contact list with a link to the webinar registration page
- Social media promo: partners promote the online training via their social media channels in order to reach new audience
- Email: an email introducing the presenters and providing a description of the online training
- Landing page: a landing page with a webinar description and a registration form.
- Survey: in order to take part in the online training you need to register by filling in a survey
- Webinar: attendees take part in a live webinar where they can interact with presenters via chat
- On-demand webinar: registrants who can’t join the live event, can watch the webinar recording at their convenience
Create your first sales funnel for free
Plan your customer journey based on the information from this article and use the 30-day free trial to put your ideas into practice.
I recommend you start with a landing page where people can sign up for a newsletter. Then create an email series that will provide your contacts with the information they need to buy your product.
If you get to work and create all your assets in the first week, you’ll be able to sit back and observe the results after 10, 20, and 30 days. Good luck!