What Is A Sales Funnel?

If your business operates online, you have probably heard of sales funnels. However, you may not be quite sure what they are, how they work, or if you even need one for your business.

Sales funnels can be an indispensable tool for gaining new customers, retaining current customers, and increasing your conversions and sales. Once you learn a little more about how they work and the impact they can have on your business, you'll be able to grasp the true benefit they can bring to your business.

What is the Purpose of a Sales Funnel?

Sales funnels are designed to help you increase your customer base and make current customers more loyal and likely to share your products and services with others. When these two goals are accomplishes, your business will see an increase in orders, higher order amounts, and increase in your customers sharing your products with their friends and family.

Sales funnels are designed to ‘funnel' potential customers down through a series of filters that results in them placing an order. Sales funnels operate on the premise that most buyers aren't going to just place an order their first time they hear of your company or visit your website. As customers go through each stage of the funnel, they learn more about your company, gain interest, and become more committed to making a purchase.

Why Do I Need a Sales Funnel?

Without a sales funnel, you are just hoping that customers who land on your site will place an order. However, this is rarely how things work anymore. Most customers want to learn more about a business and don't order right away. So, instead of placing that order after they visit your site, they'll likely leave your page. Most won't return on your own. This likely means the money you spent on your ad campaign to direct customers to your site was mostly wasted.

A sales funnel can help you build a relationship with your potential customers and earn their trust. Once these two steps are met, customers will be much more likely to place an order through your site.

Another benefit of using sales funnels is that they can help provide your business with more consistent flow of orders. Once your funnels are set up, different customers will be in various spots within the funnel, so you'll see more orders coming in at different times. Since each individual customer is different, they all move through the funnel at different speeds. This can help keep your sales and revenue up and reduce the amount of time you and your colleagues spend trying to track down orders by manually following up with leads or past customers.

And, possibly, one of the biggest benefits of a sales funnel is how beneficial they can be in getting past customers to return to your site to make a new purchase. Once a customer reaches the ‘end' of the funnel and orders from your site, they are not done with the process.

The sales funnel will help you stay in touch with your customers through email marketing and other strategies. This can have a huge impact on your business since returning customers almost always spend more money that first-time shoppers. As much as a third of your business's income may come from return shoppers, so you should be able to clearly see how beneficial return customers can be.

What are the Stages in a Sales Funnel?

Sales funnels are made up of different stages designed to help move your customers through the funnel and provide you with the end result of them placing an order or signing up for the services you offer.

Picture a standard funnel. The opening at the top is much larger than the opening at the bottom. With a sales funnel, the number of people who enter your funnel will be much larger than the number of people who ultimately leave it as a paying customer. But this is to be expected and perfectly fine. You just want to use your funnels to convert more customers than you would be able to using other methods.

There are five stages in a sales funnel: awareness, interest, decision/desire, action, and retention. While the stages in all sales funnels are the same, the way each business implements them and sets up a funnel will look different. Different businesses have different needs and customer bases, so it makes sense that their funnel will not be identical.

We'll share more about what each stage in the funnel looks like and the goals associated with getting customers to move through the various stages.

Awareness

In the awareness stage, you are just trying to increase the pool of people who are aware of your company. You want potential customers to know that your products and services exist and help them get a sense of how they can be used to provide a solution for the problems they may be experiencing.

Potential customers can become aware of your company and products in a variety of ways. They may see a post that is shared on social media by one of their friends, or they may click on an ad on social media or Google that your company paid for. Potential customers may also find your company by searching for their specific needs on Google of another search engine.

However they find you, the awareness stage involves customers visiting your website or another page to learn a little bit more about your company.

Interest

The next section of a sales funnel is the interest stage. Here is where you will work to cultivate the interest of visitors to your website or social media pages. You want customers to make a connection between a problem they are facing and the solution your products or services can offer.

Once customers have become interested in your product, they are more likely to sign up for your email newsletter or follow your social media page. Once this happens, you'll be able to stay connected with them and help move them through the remaining stages in your sales funnel.

Decision/Desire

Now that potential customers have started to develop an interest in your products or services, you need to move them from being intrigued by your products to actually wanting to order them and try them out. To move them from the interest to decision stage, you will want to stay in contact with them and remind them of the different solutions your products or services can offer.

Once customers have signed up for your email list or liked your social media pages, it will be easier to accomplish this goal. You can send them targeted emails to help them visualize the positive impact of the products or services you offer. Another way to help move customers to the desire stage is by running ads that will help them keep seeing your company as a solution for their problems. For customers who have liked your social media pages, posting content about your products or running ads through Facebook or Instagram can also be very effective.

The goal of this stage is to convince potential customers that they need your product and help them decide to follow through and make a purchase.

Action

Once customers have decided that they want the products or services your company has to offer, the next stage is getting them to complete their purchase or sign up for your services. After they have completed that purchase, you will want to be sure to follow up with the final stage of a funnel, retention.

Retention

Retaining customers is key for the success of your business. If every customer only made one purchase and never visited your site again, you would not live up to your true potential. You want to encourage your customers to come back to your site and share what you have to offer with their friends and family.

A big piece of retaining customers is staying in contact with them after they have made a purchase. Different things you can try to retain customers include following-up shortly after they place their order with a thank-you email, sending them product tips and suggestions to help them get the most out of their purchase, sharing additional products that could be used with the one they purchased, and sending special offers and promotions.

How Can I Create a Sales Funnel?

Before starting the process of creating a sales funnel, it is important to learn more about your current customers and potential customers. Discover their needs, challenges, and steps they have already tried to address their problems. Once you learn more about your customers, you'll be able to develop a more effective sales funnel that will offer the solutions that people are most in need of.

It is very likely that you will want to develop more than one sales funnel. Different customers are looking for different solutions. Also, not every customer makes decisions in the same way, so what works for one group of people will not work for everyone.

To help you identify the different customer types you'll need to address, you can create customer personas. This will help you create more personalized and effective sales funnels that will convert more visitors to your site into customers who are ready to place an order.

After you have learned more about the needs of your customers, the next step in developing a sales funnel is to generate leads and direct traffic to your website. There are different ways you can achieve this goal, and you may choose to use one or more methods.

One way to attract visitors to your site is through paid ad campaigns. With ad campaigns, you will create ads that share a common problem customers may be facing and offer a solution. With paid ads, you'll pay for each customer who clicks on your ads. Google Ads, Facebook Ads, and Twitter Ads are a few different examples you can look into.

Another option for directing traffic to your site is to use affiliate marketing. Here, you'll share a portion of the sales from each customer who is sent to you from another website. This can enough other websites and blogs to link to your site or products since they'll earn a cut. With affiliate marketing, you only pay when a customer makes a purchase, so you won't lose out on the customer who visit your site but don't place an order.

After generating new leads and directing traffic to your website, you want to keep your leads engaged and interested in what you have to offer. Keeping your products on their mind and sharing new ways they can offer solutions will increase the chances of them moving through the different stages in your sales funnel.

There are a variety of techniques you can use to keep your customers involved. They include sharing videos, creating blog posts, sending email newsletters, posting on social media, using the Facebook life feature, and more. Implementing numerous techniques will increase the chances of connecting with each customer in the way that is most effective for them.

Finally, you need to move customers down to the action stage in your funnel, since this is where they will actually complete a purchase. Once you have learned more about the specific needs and interests of your customers, you'll be able to make specific offers that are appealing to each customer. Remind the customer what your products can do for them, and consider adding a special promotion or discount to help seal the deal.

Sales funnels are a very powerful tool. They can help propel your business forward and generate new leads and customers that you didn't even know were out there.