What is a Sales Funnel? Can it Make You Rich?

“Sales funnel” is a marketing term that describes the journey that customers go through before they make a purchase. Sales funnels have many steps, referred to as the top, middle, and bottom of the funnel. Depending on your company’s business model, the structure of the sales funnel may vary.

Even if you’ve never heard of the term “sales funnel,” your business has one. Knowing what it is and how to use it to your advantage will help you make your business more successful.

In order to understand the concept a bit better, imagine a physical funnel. A substance is poured into the top of the funnel and it travels down until it reaches a point. The same thing happens when you make a sale.

The goal is to have possible customers enter the sales funnel and make it to the end, or complete a purchase. But, you can’t guarantee that customers who enter the sales funnel will make it to the end.

In this guide, we’ll explain how sales funnels work, why they’re important, and how to use them to your advantage.

Why is it Important?

Before we dive into the intricacies of the sales funnel stages, it’s essential that you understand why you should invest time and effort into building yours. In order for marketing and sales efforts to be worthwhile, you need to establish consistency.

Sales funnels allow you to shift gears and focus on creating repeat customers, rather than making one-time sales. Funnels allow you to appeal to a larger audience.

Apply your knowledge of your target audience to your sales funnel, and you will be able to create leads faster. Sales funnels also allow you to track your progress and study figures.

What Is It?

What is a sales funnel you ask? At the beginning of a sales funnel, there are a lot of potential customers who may have heard of your product or service. The number of potential customers decreases as you get further down through the funnel sales process.

Only some may be interested in learning more. Only a select few of that will actually contact you. Here are the stages of the sales funnel:

Awareness

When your prospects first enter your sales funnel, they are in the awareness stage. Whether it was through a newsletter, online quiz, or app download, you’ve managed to grab their attention and encourage them to enter the funnel.

The goal of the sales funnel is to solve your customer’s problem. Spend some time understanding your target consumer and the needs they have. From there, you can create content that addresses those needs and offer your product or service as a solution.

Getting a prospect inside the sales funnel is only part of the battle. Depending on how they’ve ended up on your website, perceptions about your business may vary. Opt-in rates will reflect that.

If a customer stumbles upon your website organically, they are more likely to trust you. This just means that they sought out a product or service like the one that you offer on Google, and ended up on your website as a result of that search.

If they discovered your business through an advertisement, they might not be as trusting.

Regardless of how they ended up in your sales funnel, your goal should be the same. You want to guide them through the stages of your sales funnel and turn them from prospect to customer. Although, consumers are becoming increasingly less trusting, which means that marketers must put in a lot more effort in order to obtain customers.

Once you’ve made them aware of your company, the next step is to stimulate interest. You must make your prospect see the value in whatever you’re offering them.

Interest

One of the most common and effective ways to garner interest from prospects is to begin an email sequence. Getting a prospect to sign up for an email newsletter gives you the opportunity to send them marketing messages habitually. In these messages, it is your job to be sure the content is relevant, focused, and clear.

In order to make your prospect interested in your product or service, you have to make that product or service appeal to them. Or, you have to position your brand in a way that relates to your target consumer, so they feel represented by your business.

Be sure you send out a balanced variety of emails. Don’t strictly send emails that push your prospects to purchase something. Include emails that are story-based so your prospects don’t feel pressured.

Ultimately, you want them to make it a habit to click on your links. Whether you’re linking them to a blog post or a product page, it’s important to get those clicks and build a relationship with your potential clients.

Decision

The next step of the sales funnel, and one of the most challenging is the decision stage. After you’ve gained their interest, built a clicking habit, and created a relationship, you need to encourage them to follow a call to action.

A great way to do this is to have lots of rave reviews and testimonials displayed on your site. When other customers leave positive reviews, prospects are more likely to purchase your product with confidence.

Another way to encourage decision-making is to use paid ads. Facebook and Google are great because you can re-target ads. This means that people who have seen or reacted to a past advertisement of yours will be exposed to ads from your business again. If that prospect is already in your sales funnel, the chances of them acting are much greater.

There are many ways you can convince a prospect to purchase a product from you:

Make them feel as if the product you are providing them with has a lot of value. This will turn their purchase into an ongoing exchange and make them a repeat customer.
Give them a story that they can relate to. People are more likely to buy something if they respect you. Your business’ success depends on how people perceive it.
Earn respect from top players in your industry. If you seem like an authority figure in the industry, people will be more trusting of you.
Understand the value of reviews and testimonials. Make sure you have a strong social media presence with lots of customer engagement.
It’s okay to make a potential customer feel like they are short on time. Don’t spam them with messages but gently remind them every now and then that a discount or promotion is almost over will compel them to act immediately.

Action

The final phase of the sales funnel is the action phase. Hopefully, you will have convinced them to make a purchase by this point. The likelihood of your prospects doing what you ask of them depends on how effectively you moved them through the different stages of the sales funnel.

It’s important to know your conversion rate during the action stage. For example, if you get 100 clicks on your offer and 10 people enter your sales funnel, but only 2 of those people actually purchase something, your conversion rate is at 2%.

Let’s say that it costs you $200 to send 100 people to your site. If only two people make a $300 purchase, you get a 300% return on investment. Understanding these figures of the sales process is essential if you want to know when it’s appropriate to change your offers.

Building a sales funnel is a complicated process. But, when you do it right, you can turn prospects into customers with little effort.

Types of Sales Funnels

Sales funnels can be digital or physical. Here are the key elements of each:

Physical

You display a product outside of your store. When people see that product, they may be interested in purchasing it.
The person who is interested in your product will enter the store and ask about the price.
You spark a conversation with the customer and tell them more features of the product. At this point, you could offer them a discount so they are tempted to purchase the product.
Because you’ve offered them a discount and shown them how the product could be of value to them, they proceed to check-out.
The customer leaves with the product and shares their enjoyment with other people.
At a later date, one of those people that your customer shared information about the product then enters the store and hopes to make the same purchase.

Digital

You create a digital ad for your product and post it on your website or on social media.
Someone sees the ad and is interested in it.
That person searches for your business or products using Google.
They visit your store’s website and sign up using their email.
They purchase your product.
You follow-up with the person and notify them about upcoming deals and promotions.

Creating a Sales Funnel

Building a sales funnel does not require extensive design or coding experience. Using the online software, ClickFunnels, you can create a sales funnel within minutes. The platform supports auto-responders, ad creations, billing methods, and more.

To increase the efficiency of your sales funnel, you’ll want to add integrations like a member’s area, opt-in pages, order forms, sales pages, and other types of content.

ClickFunnels makes it easy by putting all of these integrations on a single platform. The software is not only easy-to-use, but it will save you time and money. Here are some of the funnel types you can create with ClickFunnels:

Lead generating: for expanding your mailing list
Sales: for increasing profit and includes products, services, up-sales, and one-time offers
Webinar: for promoting your webinar and encouraging people to register
Online courses: for generating leads and increasing the number of registrations for your online course
Memberships: for soliciting membership sign-ups and membership renewals.

Getting Started with ClickFunnels

ClickFunnels offers first-time users a 14-day free trial. When you sign up for your account, you can choose between two types of plans.

Basic: This option is best for small or new businesses. With this plan, you can create 20 funnels and 100 pages. You can host a maximum of 20,000 visitors. The monthly fee for this plan is $97.
Etison Suite (now Platinum): This option is best if you are running a corporation or company. With this plan, you can create an unlimited number of funnels and pages, and host an unlimited number of visitors. You also get access to an affiliate program integration called actionetics so you can set three billing methods.

Setting up a Funnel

When you get started with ClickFunnels, you can choose between three different types of funnels. You can choose to host a webinar, collect emails, or sell your product. Here’s an example of how to set up an email funnel:

Either choose one of the pre-made templates or build your own. Using one of the templates makes the process much easier.
If you’ve decided to use a template, simply input your logo, images, and copy.
Create a thank-you page for customers to be directed to after they sign up.
Connect your auto-responder with the thank you forms and opt-in. This will make it so they can send follow-up emails and send offers to clients.
Monitor your sales funnel habitually.

Other Tips for Successfully Managing a Sales Funnel

Don’t Drop Leads too Quickly

When it comes to making a sale, “no” sometimes means “maybe later.” For example, when a prospect says something along the lines of, “I don’t have time right now,” that might mean that they recognize how your product or service can be of value to them, but they don’t have the means to seek it out quite yet.

Your first instinct may be to drop this lead and focus on the next. Actually, you should create a follow-up email campaign that addresses that specific problem. If their problem is that they don’t have time, offer them an incentive that they won’t want to refuse.

Have an action item in place for when a prospect objects to what you’re offering them. Be sure they are educated about the product, its benefits, and how easy it is to use or set up.

Always Follow-up

A lot of sales reps don’t follow up with prospects as often they should. Business News Daily reported that 80% of sales closed between the fifth and 12th follow-up.

Even if a lead is old, there’s still value there. Persistence is key in sales. Although, be sure you are being persistent rather than annoying. Make sure your prospect knows that you still want their business, but don’t hassle them about buying from you.

Analyze past leads and see how many times you contacted your prospects. If you aren’t the type to follow up frequently, now is the time to take up the habit.

Be Quick

Prospects are much more likely to buy something from you if you follow up within a few minutes of them expressing interest. Even waiting 30 minutes drastically decreases your chances of making a sale.

But, manually responding to everyone who is interested in your product isn’t feasible. Sales funnel automation is the solution to this problem. Have a system in place so an automatic response is sent out to any interested prospects immediately after they contact you.

Make sure you have a personalized email prepared for your prospects. This will make the interaction more personal.

Diversify Your Content

Another way to garner interest from people is to have many different types of content featured on your website or social media. If your platforms are too dense with a certain type of content, people may get bored.

Use videos, info-graphics, style elements, and more to make people interested. People want to feel stimulated by the businesses and brands that they interact with.

Use Landing Pages

The ads that you publish need to take your prospects somewhere. The best place to direct prospects is to a landing page that displays an offer. The interest phase is early on in the sales funnel, so you’ll want to focus on generating leads rather than pushing a sale.

Landing pages are meant to urge customers in the right direction. Include a clear call to action that encourages them to sign up for an email newsletter or watch a short clip.

Have Rebuttal Emails Ready

As we said, it’s important that you have rebuttals ready for all the different objections your prospects might give you. This means being prepared to argue the phrases, “We don’t need it,” or “I don’t have any time.” Create a series of emails that address these objections and send them out over the following weeks or months.

Depending on the nature of the objection, you’ll want to send different materials at different times. Use testimonials from other customers, video content explaining the set-up process for your product, or simply check-in emails.

If you use all of these tips, the likelihood of you creating a sale is much higher. Being responsive is key to completing a sale.

Optimizing your Funnel

There are many ways you can optimize your sales funnel. The most important areas are the ones where prospects are moving from one stage to another.

For example, it’s better to run several Facebook ads rather than a single ad. These ads can be alike but put them in front of different potential buyers by using Facebook’s targeting features.

Begin the optimization process at the top of your sales funnel. Assess the content you are putting out. Does it encourage people to listen to your CTAs? If it doesn’t, try another type of content.

Then, be sure your landing page is prepared for incoming traffic. The content on your landing page should be similar to the content displayed on the ad. Play around with headlines, body copy, CTAs, images, and other elements to find out what is the most effective.

For the action state, A/B test your offers. Is free shipping more effective than a 10% discount? This varies depending on the demographics of your business. Understanding small factors like this makes a big difference.

Finally, pay attention to how many customers you retain. Do the prospects that turned into buyers come back to your store? Do they refer their friends to you?

Measuring Your Success

One important facet of managing a successful sales funnel is the ability to measure your success. As your business grows, you may need to make alterations to your sales funnel. To measure your success, keep track of your conversion rates.

For example, if you run a Facebook ad that encourages people to sign up for your email list, keep track of how many people sign up as a result of that ad. Pay close attention during each stage of the sales funnel?

Are you grabbing the attention of prospects with the first piece of content they see from you?
Are your prospects trusting enough to give you their contact information?
Have you closed sales as a result of email marketing campaigns and other marketing activities?
Do past customers make repeat purchases?

Final Thoughts

Creating and managing a successful sales funnel takes a lot of thought and commitment. It is hard work, but it can make your business much more successful.

Simple details like font choice make an impact on conversions. It’s essential that you understand your target audience so you know how to meet their needs. Understanding their process as consumers is key and that should inform all of your marketing efforts.

Your sales funnel is a work in progress. As your business develops and expands, you’ll want to make adjustments. Each stage requires careful consideration, so you should try different approaches and see what works best for you. This simple model can help you scale your business and increase your profits exponentially.

To keep the success going, be sure you assess your model over time and see where you have the most success. Place more focus on the methods that produce the highest ROI.

We hope you found this comprehensive guide to sales funnels helpful. If you’d like to check out some of our other guides, click here.