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What is a sales funnel?

Last updated

29 April 2023

Reviewed by

Miroslav Damyanov

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People tend to think of a sale as a fairly simple transaction. A business offers a product, and a customer buys it. However, the process of arriving at a sale is a journey comprising several steps.

That journey is called a sales funnel and knowing how to manage it can make the difference between a successful sale and a customer walking away empty-handed.

Typical sales funnel structure

A sales funnel is designed to guide prospective customers to the point that they're ready to purchase. It starts when they first hear about the product and ends with a sale.

It's represented as a funnel because many people may hear about a product, but some of them will disengage before they get to the end of the process and purchase. The number of people in the funnel diminishes as it progresses.

Let’s look at the three stages of a sales funnel and how they work:

Top of the funnel (TOFU) 

This stage is when potential customers start looking for an answer to a problem they have. To begin the process of leading them to a sale, they have to become aware of your product. TOFU is about getting their attention.

Middle of the funnel (MOFU)

At this stage, potential customers actively gather information about possible solutions to their problems. They're not typically comparing companies yet; they're comparing solutions.

If you can answer lots of consideration questions, you might establish trust with your qualifying prospects at this stage. Provide case studies, white papers, promotional materials, downloads, or any other educational material you think of.

Bottom of the funnel (BOFU)

By the time they've reached this stage, they’ve gathered a lot of information about what they're looking for, and they're ready to compare products to make a decision. Ideally, they're aware of who you are, what you offer, and why it's unique.

At this stage, you might want to help your qualified prospects to experience your solution by providing demos, product trials, special discounts, and details about the tiered pricing.

Actionable tips for creating a high-converting sales funnel

Knowing these stages and how they work can help you design a plan to meet people's needs at each step. Here are some tips to help you do just that.

Know your ideal customer

Before you can meet your customers’ needs, you have to know who they are and what they want. If you set up a sales funnel without accurately identifying who you're targeting, it won't be successful, no matter how well it's designed.

Research your market thoroughly to get a clear understanding of your potential customers' demographics and interests.

Personalize your customer's journey

You need to provide the exact information your customers are looking for. Now you have a snapshot of who they are, discover what questions they have and what problems they may be trying to solve.

Drive traffic to your website

It's important to use the keywords and questions that your target customer is searching for. You can use software that shows what keywords drive traffic to your competitors' websites, then personalize them to your products. Be sure to offer information that will spark the interest of your target consumers.

Engage your customers

Once you've convinced people to visit your website, you're ready to introduce your products. Strong product pictures are a vital part of any website. Reviews and customer stories about product benefits are also effective ways to capture their attention.

Use sales automation tools

A complicated or frustrating checkout process is one of the top reasons people abandon items in their cart and never return to complete the purchase. Effective sales automation tools streamline the process, making it much easier for an interested customer to complete the sale.

Sales funnel templates

When it comes to sales funnels, it’s not a case of “one size fits all.” The exact sales funnel steps that will work for you depend on the type of business you have.

Remember, too, that a successful sales funnel should work as a well-oiled machine, even while you sleep. When implementing your sales funnel, be sure to include automated tools that will boost your sales potential. Some examples of these are:

  • Paid apps to drive traffic

  • Automated sales processes and email follow-ups

  • Prerecorded webinars

  • Targeted onboarding emails

Here are four templates for sales funnels to fit different industries.

SaaS sales funnel

Capturing an SaaS (software as a service) sale doesn't guarantee future purchases from that customer. The SaaS market is intensely competitive, so it's even more important to provide high-value products that capture and retain customers' interest. It's also vital to effectively engage with your consumers.

For this model, the key steps are:

1. Awareness

Attract customers to your site by researching what typically drives traffic to similar sites. It's vital to invest in understanding which strategies work.

2. Engagement

Dig into the data about your product and how it's used. How long do your customers spend using it? How often do they return to it?

Each subscription renewal can be considered another sale, so you'll want to understand where customer satisfaction may falter and address those problems.

3. Purchase

Motivate purchases by offering live demonstrations, free trials, and sales quotes. Following the response to these different options will help clarify which is the most effective.

4. Retain

Unlike other kinds of sales, SaaS sales aren't over once a customer makes a purchase. To maintain subscriptions, customers must continue to get value from the product.

Having a supportive account manager is important, as well as an excellent customer support team to provide seamless onboarding and address tech problems whenever they occur.

Enterprise Sales Funnel

These complex sales require an added level of effort to develop trust. It's extra important to identify who you should target for sales, because so much time is invested along the way in this sales funnel.

1. Initial appointment

This is usually a phone or video meeting, and it clarifies their needs. The sales rep can discuss what they're looking for and the problems they've encountered.

2. Qualified to buy

Not everyone will have the means or desire to purchase your product or service. Equally, you may not be providing what they need. Don't waste everyone's time if you don't have the answers they're looking for.

Understand your potential clients’ business goals and operations to see if you can help them. The information you glean from the initial appointment should help you determine if your product is a good match for them.

3. Pitch

Once you and the potential customer are clear about what they need and how you can help them, it's time to outline what you have to offer.

4. Negotiate proposal

When the customer is prepared to move ahead with a trial or purchase, work out an acceptable proposal with them.

5. Close

Hopefully, the prior steps lead to a deal. But even if they decide not to buy, it's worth following up at a later date to see if they've changed their mind.

B2B consulting sales funnel

A B2B sales funnel is usually more complex than B2C sales.

1. Awareness

Your goal at this stage is to get a potential buyer interested in your brand. The focus is on promoting the company more than the product. You can do this through tools such as blog articles.

2. Interest

Once you have their attention, it's time to outline what you have to offer. In particular, focus on the solutions you provide for their problems. You can offer things like eBooks, webinars, and newsletters to discuss these things.

3. Consideration

Once the customer is aware of the solutions you offer, you can start providing more information on specific products. Demo videos are a good example of this.

4. Intent

At this stage, potential buyers are interested in a specific type of product, but they haven't yet settled on a brand. Product-focused whitepapers and webinars are a good way to reach out to them with the information they need to see your product in a different light from all the others.

5. Evaluation

The buyer has all the information and has weighed their options. This is the time to offer a discount and engage in conversations and negotiations.

Social media and email marketing sales funnels

Marketing on social media and through email presents specific benefits and challenges. The same message will be in front of potential customers who are at different stages of the sales funnel.

1. Awareness

An eye-catching representation of your brand or product is a must for a visual medium. Beautiful pictures or videos will capture potential customers’ attention.

2. Intent

Once you have eyes on you, it's vital to give them the information they're interested in and tie it to your product or brand. For example, a makeup company can offer a video tutorial on an easy way to create a winged eyeliner look, using their products.

3. Conversion

They're interested in your brand, so it's time to reach out with offers to encourage them to buy. These could be things like discounts or time-limited sales. Make it easy for app users to purchase without leaving the site.

4. Loyalty

The sales funnel isn't over with a purchase. It costs much less to keep a customer than it does to find one, so try to keep the conversation going. Invite customers to share their experience with the brand. Encourage connection by highlighting the responses of satisfied customers.

Bonus: Sales call analysis template

A well-designed and targeted sales funnel can make a huge difference in the number of sales you get. Along the way, collecting information is vital to help customers continue toward a purchase. One of the ways you can do that is by tracking how effective sales calls have been. For a sales call analysis template, click here. With the right information and sales funnel, you can find the best way forward toward more sales.

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