A sales funnel is a crucial part of a company’s marketing and sales plan. It shows how a sale develops from obtaining leads to closing the deal. Your marketing techniques will become more effective and efficient if you learn how to build an effective sales funnel.

An illustration of the customer’s purchasing process is a sales funnel. It shows how leads, also known as prospects, go through the sales process from initial exposure through recurring purchases. The activities of the customer and seller that lead to the sale of products or services are streamlined by the sales funnel.

This process is known as a funnel because it’s represented as an inverted pyramid or funnel, that shows the number of prospects in each part of the sales cycle at any given time. The top of the funnel is broad, indicating the large number of people exposed to the company. As they express interest and engage with your company’s marketing actions, the funnel narrows. This signifies a deeper interest and a shift to potential customers.

Those most interested in your product or service move down through the funnel as uninterested leads drop out. Ultimately the sales funnel’s marketing strategies lead to the prospect completing a purchase and becoming a client or customer. Improving the funnel’s efficiency at each stage is a marketing priority to make the whole sales process more profitable.

You need to be aware of the various stages if you want your sales funnel to function properly. But this goes beyond just understanding what each level means. When you are developing your funnel, you must also comprehend precisely how to use these stages to your own firm. You can make sure your funnel successfully moves the most qualified leads along while eliminating the unqualified ones in this method.

Let’s examine the five stages of the sales funnel now, along with some practical applications.

1. Awareness

A sales funnel starts when someone first becomes aware of your company, product or service. The stage is the widest portion of the funnel. This may be the first time they visit your website, read your social media post or hear about you from another customer or follower.

The person may not realize they have a problem that needs solving. However, as they move through this stage, they discover the problem and learn about possible solutions. This is when you focus on making prospects aware that you have products or services to solve that problem.

At this stage, your goal is to generate enough interest upon initial exposure that the prospect signs up for a valuable free offer in exchange for their contact information like an email address or phone number. This will also help you clarify your target audience and buyer personas by gathering data and deepening your understanding of your customers. 

Strategies for the awareness stage

They include:

• Develop a clear brand message and mission statement
• Clarify your ideal customer’s demographics and psychographics
• Specify in your messaging what problem your product or service solves

Here are ways to build awareness about your brand:

• Company website
• Social media posts
• Search engine optimization (SEO)
• Affiliate marketing
• Independent research
• Print and radio ads
• Videos
• Infographics
• In-person events

To determine which marketing efforts are working best, look at the marketing analytics for your website and see what keywords and messages seem to be resonating with your audience. You can also use online tools to see whether keywords are driving traffic to your website from search engines.

2. Interest

Once a person becomes aware of your brand, the next funnel stage is to develop their interest in your business and learn about your offers. Increasing their interest may start with online content describing topics relevant to your business’s offer. The company also starts to build authority and credibility with its brand.

Read Also: 10 Proven Ways to Increase Conversion Rate Throughout Your Sales Funnel

In this stage, they shift to prospective customers by taking steps like following you on social, subscribing to your email list, asking questions or sending direct messages. They then actively start looking at how your offer solves their problem or issue discovered in the first stage.

Strategies for the interest stage

They include:

• Create blog posts relatable to ideal customer avatars.
• Identify the top keywords your prospects are using when they look for information online.
• Drive targeted traffic to your website or social media accounts.
• Create engaging content that speaks to your ideal customer’s pain points.

Here are some ways you can promote your product in the interest stage:

• Email campaigns
• Blog posts
• Social media accounts
• Free trials
• Retargeting campaigns

The goal is to engage with your potential customers and establish trust so they’re interested in subscribing to your email list or blog. To increase the likelihood they will opt-in to receive emails and updates from you, focus on producing great content and images for your website. Some companies give away ebooks with relevant information targeted at their target audience as an incentive to join their mailing lists. Other companies offer discount codes to encourage potential customers to make their first purchase.

Example: Avi and Sara

Christine looks at some other web design companies but none are as helpful as Avi and Sara’s agency. She goes back to their website several more times to read their blog posts and to watch more videos.

She’s also happy to find that they offer several free downloadable guides on how to design a website on a budget — both with a web designer and on your own. 

Avi and Sara know that their prospective clients are considering whether they should invest in a web designer or try to go at it themselves. To help them make a choice, they’ve developed detailed guides to help them decide which option is best for them. Christine is eager to learn more about her options, so she enters her email address in exchange for the guides. 

3. Desire

In this stage, prospective customers actively seek the solution that best meets their budget and needs. They may research multiple products or offers. Your company’s goal is to stand out with the best answer to their problem.

You want to build trust and rapport with prospects at this stage of the funnel. Product reviews and testimonials can demonstrate the value of your solution and how it helped previous customers solve similar issues. Let the prospective buyer know about your offers, pricing and packaging so they can make an informed purchasing decision.

Strategies for the desired stage

They include landing pages, social media posts or ads featuring lead magnets such as:

• Newsletter subscriptions
• E-book downloads
• Niche-specific calendars or planners
• Quizzes, surveys or polls
• Valuable workbooks or how-to manuals, usually in PDF format
• Samples or free trials of your product or service
• Online events such as free webinars, challenges or contests
• Templates or checklists relevant to the problem
• Free training or tutorials

Here are some ways to promote your product at the desired stage:

• Testimonials
• Case studies
• Customer reviews and recommendations
• Demo or tutorial videos
• Product comparisons

To accomplish this, use more attention-grabbing elements such as great photos of your product, videos and enticing descriptions. You can partner with social media influencers to help promote your brand or product. If you have sales already, you should also use product reviews to encourage potential new customers to buy.

Beyond your product pages, you can increase desire by creating blogs with helpful content, offering free shipping or making generous promotional offers. Ultimately, the goal for this stage is to convince the potential customer that they not only need the product but they specifically need it from your company.

Example: Avi and Sara

After reading Avi and Sara’s guides, Christine decides that she wants to build her site on WordPress. But she realizes that building her own WordPress website involves more tech knowledge than she has.

At this point, she’d rather spend her time growing her business instead of learning how to develop her own WordPress site. She decides to work with a web designer, but she needs one who will work with her budget.

Avi and Sara mention on their site that they work with new business owners with limited budgets, and this is reflected in their web content. This is how they demonstrate to their target customers how they’re different from other web design agencies.

Browsing their site, Christine feels they understand her situation and wants to learn more about how they can help her. She signs up for their free email series explaining how new business owners can find a web designer that meets their needs.

4. Action

The action stage of the sales funnel is when a prospective customer decides to make a purchase. Your company’s priority now is to successfully fulfill the new customer’s needs and expectations. To do this, you may offer extra support or educational materials on your product. Helping them learn how to correctly or effectively use your product will give them more value from your offer and increase their satisfaction with their purchase.

Strategies for the action stage

They include:

• Build the relationship with consistent, relevant emails
• Follow up quickly on any questions and queries about your company or offers
• Feature limited-time pricing specials, bundled packages or offer discount or promotional codes
• Perform consultations or live demonstrations
• Use retargeting techniques

Here are some ways you can promote the action stage:

• Insider or customer success tips
• Special offers
• Product use or training videos
• Bundled packages
• Follow-up email campaigns

To increase the likelihood of a purchase, focus on ways you can make it easy for people to buy. As you build your list of email subscribers, you can boost sales with different types of email marketing strategies. Look closely at your digital sales process and even consider testing the checkout process to see if anything could impact whether they make a purchase.

Consider monitoring small changes to see if you can impact the conversion rate for the website. For example, you might want to consider adding reviews to the checkout page to see if it increases the number of people who ultimately decide to buy.

Example: Avi and Sara

After completing the email series, Christine feels that Avi and Sara might be the best designers to build her site. She fills out their Start a Project webform with the details of her project. 

Still, she’s not ready to buy just yet. Christine needs to know that their web design services meet her needs and that they actually can work with her proposed budget. 

Avi and Sara review Christine’s project and budget and design a cost-effective plan. They respond to her by email with their website proposal and set up a phone call with Christine to review it in more detail. 

During the phone call, they walk her through their proposed plan and arrange a payment plan that works with her budget. Christine is extremely impressed with their service, and the fact that they took her needs and budget into account. 

5. Loyalty

Customer loyalty, also known as re-engagement or retention, focuses on turning a customer into a repeat buyer. Retention is a key component of an effective sales strategy because it reduces the cost of finding new prospects. As long as customers are satisfied with your services and still need your offer, they may keep buying.

Implementing retention strategies will also keep customers more satisfied and may convert them into brand advocates. Customer satisfaction is also what drives word-of-mouth marketing.

Strategies for the retention stage

They include:

• Promote customer loyalty or rewards programs
• Offer coupons or discounts for referring new customers
• Provide highly responsive customer support
• Conduct re-engagement email campaigns
• Follow up with feedback polls

Here are some ways to keep customers engaged:

• Referral or loyalty programs
• Upsell campaigns
• Re-engagement email campaigns
• Product-specific videos

You can work to increase customer lifetime value (CLV), a metric that estimates the total amount of money a customer is expected to spend at your business during their lifetime. By increasing customer lifetime value, you can significantly impact your company’s profitability.

Example: Avi and Sara

After the phone call, Christine reviews the proposal and budgeting in more detail and feels ready to move forward. She looks at Avi and Sara’s portfolio and their glowing testimonial page once more and feels confident that they are the right web designers for her.

She emails them back telling them she accepts their proposal, and submits her initial deposit. 

Avi and Sara email her back later that day, thanking her for the deposit and outlining the next steps and proposed timeline for the project. Their professionalism and attentiveness really impress Christine, and she feels confident that she made the right choice.