Sales Funnels, The Full Guide

Sales Funnels Guide

Whether or not you knew it, if you’ve ever bought or sold anything online, then you were part of a sales funnel. You might have come across a blog and signed up to an emailing list or even bought products from others through this method without even noticing it.

If this is the case, don’t fret. Creating a sales funnel is now commonly used as a wide-spread business concept. Think of it as a ship that is slowly being guided to the destination by simple waves and rolls of the ocean; the ship being, of course, your potential leads and your funnel is what will slowly guide the ships. Your business success depends on how you lead prospects on their buyer’s path, from product awareness toward purchasing decision (and even their loyalty).

So let’s start from the beginning. What’s a sales funnel? Do you really need a sales funnel for your small business?

Understanding Sales Funnels
Truth is, no matter the size of your business or niche; you most probably already used a sales funnel one way or another. The moment someone steps foot in your virtual space (your website, blog, email, etc.) all the way to their decision to buy from you, they pass through different stages of your sales funnel.

Say you’re a dentist—we know, everyone hates going to the dentist, but bear with us— when a person walks into your office, they are effectively entering your sales funnel. Then, your receptionist or sales agent will get their contact—lead—information and guide them through the sales journey—the funnel—until they become paying customers—conversion.

A similar sales process happens in the online world except it happens at a much larger scale.

Instead of your office, the entire funneling process plays out on your site. And unlike your receptionist or sales agent, your online marketing channels (website, social media, email, ads, etc.) can attract and funnel immense numbers of prospects through their buyer’s journey.

To put it simply, a sales funnel is the path that customers take to making a purchase you’re your business whilst starting out knowing nothing about your company. This route is divided into different stages based on the process that a potential consumer goes through and the precise sales and marketing strategies that enable interested prospects to commit to buying.

Buyer’s Journey
To understand how to create a functional, effective, and efficient sales funnel, you must first understand the consumer’s perspective when they begin their purchasing decision journey. The buyer’s journey consists of three stages:

  1. Awareness – The potential consumer becomes aware of their problem—whether it’s wanting to buy a new pair of shoes, a new software to assist with their business needs, or simply wants to go out and enjoy a meal at a nice restaurant—and therefore, begins searching for a satisfactory solution.

  1. Interest – At this stage, the prospect is now aware of his options and begins comparing his or her alternative choices such as products, brands, prices, features, etc.

  1. Conversion – This is the stage in which the prospect finally chooses a solution from the choices presented and takes action.

However, the buyer’s journey doesn’t end there. Once a lead becomes a customer, you can strengthen your funnel through quality design to which will help in building a lasting relationship and gain loyal customers or even brand advocates.

Thus, we can expand our buyer’s journey model to hold these latter stages:

  1. Post-Purchase Evaluation – Customers try out your product/service and are satisfied so in return, they will keep buying from your business on a regular basis.

  1. Advocacy – Loyal clients are pleased with your company and actively promote it through word-of-mouth (in person, on social media, etc.).

The reality is that most customers won’t buy your products or services on first sight. This is why a sales funnel has several touchpoints designed to lead potential customers to buy (conversion).

Now that we understand the path that the buyer takes from the moment they grow to need or want a solution to an existing problem until the buyer takes a purchasing decision and generates feedback, we now can begin taking a look at what an online sales funnel looks like.

Sales Funnel
Let’s presume you’re trying to sell your website to people straight away. The only thing you’re selling is your branded product or service and the only way potential customers could engage with you is through this basic website.

However, due to lack of respect and confidence, they will exit your website without giving you any contact information. There is a strong probability you will not see them again; even if they buy your product using a low conversion rate, you’ll still miss a lot of upsells.

Using a sales funnel can make your website much more interesting by offering them a mixture of valuable and useful information. Additionally, if your leads want to know the best tips about the subject in an e-book or video format, all they’ll have to do is sign-up using their email addresses to receive your lead-magnet—a lead magnet is usually something valuable that you offer for free in exchange for their contact details (usually email) so that as a business owner, you are able to contact them in the future. You’ll be able to send them automated e-mails with interesting and engaging material that invites them to a free webinar or offers them valuable information in other formats.

The main marketing principle that impacts most—if not all—consumer purchasing decisions is a sales funnel, also known as, a marketing funnel, that functions both online and offline. It is a model that shows how the marketing strategy directs the prospects from the awareness to the conversion (sale) stage in their buyer’s journey.          

There are different ways to divide up or sort a sales funnel. Most defining philosophies will, more or less, revolve around the same elements that are generally accepted to define a sales funnel; others will emphasize or combine some elements that are not relevant to all industries. We’ve included the following five phases for this sales funnel:

  1. Awareness

  1. Consideration

  1. Purchase

  1. Retention

  1. Advocacy

Each title outlines the main goal of promotion at each level. At the first stage, awareness, Potential customers may not even know that they have a problem, or they may not understand the potential for scaling that your product or service opens up. Your objective here is to foster that awareness, to educate about the overall state of the industry and the place of the prospect in it. That could be done through content marketing efforts such as sales calls, networking events, and/or social media content generation.

In the second tier, you should encourage consideration of your specific product or service. This may include posting comparison blogs, benefits analysis, case studies, testimonials, providing informative presentations, helping sales people reach out to prospects directly and more. Basically, everything that gets people to think that your company is the one they want to work with, more than any other.

Though it’s important at every stage, in the consideration stage in particular, you’ll want to use sales CRM (customer relationship management) software that prioritizes your leads, identifying who to reach out to and when so that you’re achieving the best results.

Now the moment of truth, the purchase stage. To get people to cross this hurdle, make the process as friction-free as possible. Offer them a free sign-up, free trial offer, or perhaps a coupon code. Have one of your sales people get in touch (ideally they already have been before this stage) to answer any questions they have, or to gently nudge them along.

Approaching the fourth phase, retention refers to preventing customers from leaving. The goal is to encourage them to continue using your product or service. Retaining a customer means spending money on qualified candidates, those whom were already proven to be valuable leads rather than shots in the dark that are brought in by acquisition. By encouraging retention, you increase revenues without having to increase the number of customers.

“Retention is the single most important thing for growth.” – Alex Schulz

Lastly, while it may feel as though your job is done once the client has made a purchase, don’t forget to encourage advocacy among your clients! You could try checking in with them on a regular basis, tackling any issues they might be facing regarding your area of expertise, and taking all necessary actions to ensure their success using your resources. Later on, you could politely ask for their ratings, testimonials and you can even give them referral opportunities depending on your industry.

Components of a Sales Funnel

When developing content to attract your customers to your business or brand, you must take into consideration certain components of a sales funnel.

At the very top of the pyramid is your buyer persona which represents your ideal customers or your target audience. These people are your inbound leads that you’ll want to attract to your website and into your online sales funnel.

The main components of your sales funnel are as follows:

Traffic sources that drive visitors to your site.

  • Top of the Funnel (TOFU) addresses prospects in the awareness stage.

  • Middle of the Funnel (MOFU) is intended for prospects in the consideration stage.

  • Bottom of the Funnel (BOFU) closes the deal at the conversion stage.

Customer retention aimed at post-purchase phases (loyalty and advocacy).

Re-engagement paths recover lost prospects and customers and bring them back into the sales funnel.

Top of the Funnel (TOFU)

The TOFU category encompasses about 85 percent of people visiting your company’s website. Getting the information about who these visitors are and what they’re interested in is very important during this time. This stage is all about making these visitors aware of what the problem is they may be facing and how your products or services can help them solve this issue.

At this point, most visitors aren’t ready to purchase your products and services. Therefore, TOFU’s most important goal is to turn these tourists into prospective customers who are aware of what they need, by supplying them with knowledge and material they are interested in, in order to attract them to your products and services.

Once you get their information, you can start providing them with more interesting content in the form of blogs, social media updates, newsletters, photographs, infographics, audio podcasts, videos, ebooks, etc.

Middle of the Funnel (MOFU)

Approximately 10 percent of people visiting your website on the internet fall under this category. These are the people you have turned into prospective customers at the TOFU stage. They are what we call ‘shoppers’, who already know what they need to solve the problem they face and are willing to look for options to buy it. They will look for various options, evaluate them and then choose the one that they find most suitable.

This is the stage where you provide as much knowledge about yourself to your prospective customers and where you position yourself as the market leader by building trust between them and your brand. Visitors are now searching for specific products or services, even if they don’t want to purchase them, yet. Therefore, it’s important to turn your potential customers into leads that believe you hold the solution to their problem.

This could be done by providing them with discounts/offers, educational resources, quizzes, surveys, webinar, events and much more.

Bottom of the Funnel (BOFU)

This is the category in which only around 5 percent of your business website visitors fall. Such individuals are the leads we call the ‘buyers’ who are most likely to custom the products and services. They are the crowd with the most experience, who knows what they want and where they want it from. Because they are the most successful crowd, maintaining a good relationship with these prospects by cultivating and transforming them into happy customers is important.

You need to impress the customer at this point and make them feel special. One way to do that is to give them gift cards, coupons, thank you cards, etc. Another way to achieve this might also be to provide your leads with valuable discount codes on their first order.

This is also your opportunity to learn what the consumer thinks of you by seeking their feedback and accepting it. Improving your business will go a long way when you take your customer’s comments and suggestions into consideration.

Re-Engaging Lost Prospects

The closer it gets to the bottom, the people will inevitably drop off your sales funnel. After all, that is why it’s called a funnel. Since you have hundreds of users coming to your website, the top part is the widest, but it narrows down towards the bottom.

For those who abandon your funnel, not all hope is lost.

You can recover lost prospects and bring them back into your sales funnel with retargeting ads and/or remarketing emails.

Retargeting ads are a form of advertising to users that entered your funnel but haven’t completed a purchase. For a set amount of time, users will see retargeting ads following them around wherever they go on the internet.

On the other hand, email remarketing refers to sending follow-up emails reminding users of your offer, recovering abandoned carts or even pitching other related products.

Both of these tactics are meant to re-engage and remind users to come back to your site and into your marketing funnel. You can recover lost visitors and take them back to the stage where they dropped-off (e.g. abandoned cart) or take them back to the top of the funnel. Their interactions with your funnel really depend on that. For example, if a user signs up for a lead magnet, but never opens your emails, or doesn’t click through to any of your content, you might want to re-engage them with something different and bring them back to the top of the funnel. Then move them down from there.

Customer Retention

Don’t make the mistake of ignoring your existing customers in favor of chasing down new leads. Focus, instead, on customer retention.

For example, if a user signs up for a lead magnet, but never opens your emails, or clicks through to any of your content, you may want to re-engage them with something else and get them back to the top of the funnel. And from there drive them downwards. Nurturing relationships with existing customers can get your repeat business, more sales, and greater revenue.

It’s difficult to convert customers for the first time, but if your brand is satisfactory, then you can count on them coming back for more, again and again.

Invite customers to reach out with suggestions and offer support wherever possible, express gratitude for their purchase. You could also retain customers by offering loyalty and reward programs that encourage customers that will encourage them to purchase from your company again or refer your brand to another prospect.

Key Takeaways

Getting optimum sales funnel can mean the difference between being a complete unknown company and a powerhouse in the industry.

Times are changing and revenue generation can be an elusive target in today’s highly competitive environment. But you can optimize the cycle for maximum revenues and ROI using well-designed online sales funnel.

Use your website and digital marketing to funnel off prospects (and even loyalty and advocacy) from recognition to conversion. Control the marketing funnel output with conversion tracking from Google Analytics to identify problem areas and improve it in future iterations.

Aaron Moss


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