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What is a sales funnel? Strategies on how to create one

Let’s take a closer look at the sales funnel, see how it can be beneficial for your business, and learn how to create a successful one.

Scot Trumeter
Written by
Scot Trumeter
Scot Trumeter
Scot Trumeter

Scot has always been really good at keeping his head still when he gets a haircut. Besides this important fact, Scot is dedicated to taking on the challenge of businesses pain points through CRM adoption or utilization and creating relief for customers to focus on what they love and should be spending time on, their business.

More from Scot Trumeter

Published: Jul 14, 2023

| Last updated on Oct 26, 2023

| 24 mins read

What is a sales funnel and how does it work?

What is a sales funnel

A sales funnel visually represents your prospect's path from the first interaction with you to the final purchase. It assists your sales team in determining where they should follow up or change the sales process due to a drop-off in the funnel.

According to the sales funnel description, it literally acts like a funnel, meaning it is widest at the top and narrowest at the bottom. Each stage of the funnel moves qualified prospects forward and drops those who are not a good fit for what you provide. A sales funnel is closely related to the stages of the customer journey, which can be divided into three parts: top, middle, and bottom.

The sales funnel structure illustrates the process that prospects go through: Untouched > Contact made (Leads) > Qualified > Proposal presented > Negotiation > Won.

Examining your sales funnel will help you determine where you're going wrong with prospecting, where potential customers drop off, and what is causing existing customers to follow the sales funnel all the way through. Optimizing your sales funnel can have an immediate and long-term influence on your sales objectives.

Top-performing sales professionals understand every phase of their sales funnel, from cold calling to closing the deal. This benefits them in two ways:

  1. They can address main customer needs and deliver the right message at the right moment.
  2. They can improve their sales process and forecast sales and revenue to achieve their objectives.

In other words, a well-defined sales funnel improves both the customer's journey and the business's performance.

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What is the importance of the sales funnel?

What is the importance of the sales funnel

A successful sales funnel assists marketers in understanding a customer's purchasing journey and determining where the customer is in this journey. This information can be used to decide which marketing channels and activities will most effectively lead the customer to a purchase. In addition, a sales funnel enables marketers to adjust and optimize their activities and messaging in order to improve conversions.

How does a sales funnel work?

A sales funnel, as the name means, takes in a huge number of leads and prospects and narrows them down toward the bottom, resulting in a smaller number of paying customers. While the details of the sales funnel vary by industry—and even by company—we can understand how it works with an example.

Consider the B2C sales funnel for an e-commerce site. A potential customer will begin his journey as a visitor: someone who visits the site after clicking on a Google search result, social media post, or advertisement. 

When he visits and browses the website, he should be given the option to sign up for the e-commerce site's email list. If he does, he becomes a lead.

Depending on the contact information he provides, he can be reached via email, text, or phone. His interactions with these marketing campaigns are likely to nudge him back to the e-commerce website to browse related products or special offers, converting him into a prospect. 

It is then a matter of encouraging him enough with product offerings, messaging, or even a simple coupon code to convert him from prospect to customer.

What are sales funnel stages?

What are sales funnel stages

The sales process can be divided into three points: top, middle, and bottom. The customer journey starts at the top of the funnel, ideally before a buyer even considers becoming a customer. Creating brand awareness is always the first step in any traditional sales funnel —this is why you need a sales plan to get on a buyer's radar.

In order to build an efficient sales funnel, you can use a CRM system as your reliable assistant. One of them is Fireberry, an all-inclusive and customizable platform, that will help you streamline clients through self-built pipelines, and use the board view to visualize where your clients stand.

Stage 1 — Awareness

The awareness stage is when a buyer first notices a brand. It's also where businesses with full-funnel tracking begin to notice the buyer. During this stage, the potential customer analyzes a company's offerings, reads product descriptions, and conducts competitor research. They don't have an eye on anything specific right now; they're just looking for a solution.

Marketers may attract prospects' attention through their lead generation process. Companies can employ a variety of channels for their sales funnel strategy, including:

Blogs

Creating blog posts that are relevant to your target audience is an excellent method to get attention. Create content that is focused on the main topics that you want your brand to represent, and optimize it to rank for related keywords. Make sure the articles are also interesting and easy to share on social media. Because some readers will not read the whole article, you should include a call to action (CTA) near the beginning and the end of each article.

Email

There are two kinds of email marketing campaigns: outbound and inbound. 

Outbound marketing entails sending emails to buyers who have not previously contacted your company. These unsolicited messages are often ineffective, but there are strategies to enhance open rates for prospecting emails, as well as free email templates you may use.

Meanwhile, inbound email marketing involves sending messages to prospects who have expressed interest in your business and voluntarily provided their email address. They may have accessed gated content or subscribed to a newsletter. These prospects are typically more receptive and easier to target.

Social media

Many businesses now use platforms like Instagram, Facebook, and Twitter as multipurpose tools. Businesses can use them to gauge public perception, promote their brands through social proof, and provide quick and easy customer assistance.

Paid social media methods can be extremely beneficial to your lead-generation sales funnel efforts. You can pay to follow people who visit your website using cookies and then target those prospects with promotional tweets and posts on their social media feeds. This type of targeted marketing is less expensive than paying to promote a single post to a big, random group of people.

Of course, there are free ways to spread information on social media as well. Employees, for example, frequently share their company's blog posts on LinkedIn to generate awareness and interest within their networks.

Website

Remember that your brand's website also serves as a lead generation channel. Pricing pages, product descriptions, customer testimonials, and other parts of your website are likely to be visited by potential customers. Make sure every page has a straightforward and direct CTA, such as a "Sign up for a free trial," "Book a meeting," or "Talk to sales" button.

Whatever channel you use, customize your content to the buyer personas you want to convert. Studying the characteristics and behaviors of your client base might help you define your perfect prospect. Once a consumer expresses an interest in what you have to offer, he becomes a pursueable lead.

Stage 2 — Interest

When a lead reaches the interest stage, they've finished looking around and are ready to dive into specifics. Though they aren't usually concentrated on a specific company at this point, they have started to focus on one or two products that can address their problems. This is where sales teams will begin to use prospecting tools, sales prospecting, and lead scoring. They'll decide which buyers they should prioritize and which can wait.

When prospects demonstrate more interest, they move to the next stage of the customer journey. Moving buyers from the top to the middle is a delicate and frequently time-consuming sales funnel process. Businesses must repeatedly demonstrate their worth in order to gain a prospect's consideration.

Stage 3 — Decision

When a prospect enters the decision stage of the proper sales funnel, it indicates that he is prepared to buy. He may still be analyzing his alternatives, but he is ready to make a purchase. During the decision stage, it is critical to describe your brand and provide persuasive reasons for the potential customer to choose you. If you can provide free shipping, discount code, or bonus product, it will impact buyer choice when choosing one company over another. 

In your marketing materials, you should also underline what distinguishes your product or service and what makes your company unique. Make sure your website also includes a FAQ section.

Small details can make a big difference as you guide prospects down the bottom of the funnel. You're approaching a moment where a prospective buyer might change their opinion or go with another company—try to close the deal at this stage.

Stage 4 — Action

Even if a deal appears to be inevitable, salespeople must continue to push a prospect through the final stages of the funnel. Easing up on a prospective customer near the bottom can cost you a win that has been the result of a lot of hard effort. Instead, use the ASK process to guide your potential customers to the finish line:

Align priorities

Demonstrate to your prospects that you understand their problems and reiterate how you can solve them.

Secure a commitment

Remind them of the benefits they will receive, ask sales questions, and offer to address any remaining concerns.

Keep the relationship

Even if the prospects ultimately decline your offer, be sure to follow up with them later. They might change their opinion if their situation changes in the future. If not, they may provide useful insight into how you can improve the customer experience for future customers.

When you actively engage with prospects, you boost the possibilities of conversion and the likelihood of developing a fruitful, long-term relationship. In certain circumstances, those relationships and referrals that come from them might be more profitable than the initial deal.

At this stage, selecting the right CTA is also critical. Using the information you've gathered from your prospect, reiterate what your product has to offer, explain how it can address their problems, and give them a reason to buy as quickly as possible. This will remind them of the reason they were interested in the first place, increasing your conversion rate at this stage.

The sales process for many B2B, SaaS, and subscription-based firms does not end with the purchase. When a prospect becomes a customer, the sales representative turns their focus to retention. Reps must maintain contact with clients to ensure that they are still satisfied and to find possible upsell opportunities.

How quickly create and nurture a sales funnel?

How quickly create and nurture a sales funnel

Creating a perfect sales funnel does not have to be a time-consuming task. With certain knowledge, you can develop and maintain a sales funnel that will allow you to find and harvest quality leads regularly. Sales funnel management entails knowing your leads, prospects, and customers, and engaging them in a timely and appropriate manner. Here are five steps that will help you build a high-quality sales funnel.

1. Analyze your current customers

A good sales funnel creation is based on a thorough understanding of your existing clients. The more information about customers you can collect and analyze, the more effective your sales funnel will be. Customer data may be gathered by actively communicating with your customers and tracking their interactions with your online and offline presence. A customer analysis should cover their pain points, needs, goals, aspirations, and previous solutions. Using this data, you can identify lookalike audiences and send the right messages at the right time to attract prospects.

2. Engage your target audience

Your audience is likely to be distracted by many various demands on their attention. You need to capture their attention across online and offline platforms in order to get them into your sales funnel. Use captivating content that educates and informs prospects, persuades them that their needs are recognized and will be met, and encourages them to request more information. An organic (non-paid social media postings, blog articles, email newsletters, SEO) and paid (social media advertising, targeted keywords, influencer content) piece of content can be utilized to catch your audience's attention. Find strategies to align this content and related campaigns with the interests and requirements of your target audience.

3. Create an effective sales funnel landing page

All of your content should take your prospects somewhere, usually to a landing page.  An excellent landing page explains who your company is, what services you offer, and what requirements you can meet. Landing pages can also be used to entice visitors with offers and to collect contact information such as email addresses. Finally, and most crucially, landing pages should include a clear call-to-action that directs the prospect further down the sales funnel.

4. Create an email campaign

After collecting email addresses from your leads, keep them engaged with a powerful email campaign. A successful email campaign begins by informing and educating leads, assisting them in understanding how your products and services can fit their needs. Only then should it progress to provide offers to your leads that compel them to become paying customers. Instead of just bombarding prospects with crude product pitches, focus on inspiring them to become customers.

5. Continue to follow up

When a customer buys your products or services, they do not leave the sales funnel. Instead, they stay at the very bottom of the funnel, where you want them to remain. These clients have paid for and used your products and services, and you want them to return for more. Recurring communication will keep them interested. Thank them for their purchase and encourage them to return with promotional (offers) and informational campaigns.

Your sales funnel is a flexible tool, so feel free to modify it in response to market and product changes. The main thing is to establish a sales funnel that gathers as many prospects as possible and successfully narrows them down to a smaller number of loyal customers.

What is the purpose of a sales funnel? Five advantages

What is the purpose of a sales funnel

There are many benefits to developing sales funnels and employing them to efficiently guide prospects to becoming paying customers. Here are five of them below:

1. A well-defined sales and marketing strategy

Your prospect can contact you at any step of their customer journey, from early research to the late decision stage. As a result, it is critical to align your marketing and sales activities so that they get the information they require even if you are unable to deliver it directly as a salesperson. With a solid sales funnel in place, you can provide the right offer to your prospects outside of sales conversations. 

2. The right message at the right moment

A sales funnel enables companies to clearly visualize the customer journey and offers information for the stage the client is currently in.

When prospects are introduced to your brand for the first time, they require customized content to help them grasp what you really sell. As a result, they are at the Awareness stage of the funnel and require blog posts, infographics, landing pages, and checklists to feel more informed and comfortable with your company.

Individuals (or leads at this point) at the desired stage understand your business and thus require product overviews, webinars, demos, and case studies that compel them to take the appropriate action.

3. It saves time and effort

With a full-sales funnel in place, not only will your marketing and sales efforts be in sync, but you will also save a lot of time by developing content once and providing it for all individual stages of the funnel. For example, you might write a blog post on a certain pain point and send it to all prospects in the awareness stage of the funnel who are looking for a solution to the problem. 

4. Sales growth

Prospects are nurtured as they move down the funnel, therefore, if your sales funnel is fully optimized, you may notice an increase in sales. Nurtured leads generate 47% higher revenue than non-nurtured leads.

As a result, try to optimize your sales funnel and ensure that all pain spots and potential gremlins are addressed and that your leads reach the bottom of the funnel ready and happy to make a purchase.

[Related Article: How To Build A Sales Pipeline To Seal More Deals Faster?]

5. Better forecast accuracy

Sales funnels help forecast future revenue for your business. Using KPIs such as sales funnel conversion rate from the awareness stage to the action stage, you can calculate the percentage of leads you intend to convert and multiply the number by the total estimated deal size in the funnel. This will generate a sales forecast for you.

Thus, the formula for sales forecasting is based on the number of prospects at the awareness stage, the estimated deal value, and the prospect's likelihood of purchasing.

To sum up

With your potential customers' pain points and questions in mind, you can now build and implement a start-to-finish sales funnel model that will help you become a more productive salesperson.

Take action with your sales funnel right now to maximize the value of your sales leads, optimize your sales and digital marketing efforts, and develop long-term customer relationships.

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Scot Trumeter

Scot has always been really good at keeping his head still when he gets a haircut. Besides this important fact, Scot is dedicated to taking on the challenge of businesses pain points through CRM adoption or utilization and creating relief for customers to focus on what they love and should be spending time on, their business.

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