What is a sales funnel?

Every business owner should constantly be working towards improving their business model, reaching more people, and creating more sales opportunities. Mapping out the buyers' journey may seem like one of the most challenging aspects of your business, but it's not. A sales funnel can help you better visualize how people go from potential leads to customers. Instead of struggling to pinpoint your trouble spots, a sales funnel creates a 'map' that allows you to easily navigate to those problem areas and figure out how to fix them.

Visualizing your business strategy at each step allows the process to become less abstract. Being able to define and evaluate your business's successes and shortcomings using a sales funnel gives you one of the most effective systems you can implement. In this guide, you will learn why a sales funnel is important, and how to create an effective funnel for your business. We'll discuss copywriting for different stages of the funnel, and if you currently already have a sales funnel, we'll give you tips on how to update and improve it. 

Sales Funnel Definition and Basics

1. What is a sales funnel?

A sales funnel demonstrates each step that a potential lead takes to get from the first interaction with your business to customer conversion. A sales funnel acts as a road map, showing you what should happen from the first time a person acknowledges your business to the actions after a purchase.

Imagine having a storefront. You have worked hard to make it attractive and to draw people inside. Someone identifies with it, appreciating the exterior and pushing the door to come inside. They look through your products, such as vintage records or a rack of newly designed T-shirts. From here, a sales sticker catches their eye, and they remove a product from the shelf to take a closer look. Finally, in an ideal world, they walk over to the till check out, and walk away from there as a happy customer, making a mental note of the location of your store for future visits.

In online marketing, the top of your funnel is your website or app. As visitors look through your products, add them to their cart, and go to checkout, they move further down through the process, eventually landing at purchase — the bottom of the funnel.

Why is the sales funnel important?

A sales funnel allows you to be purposeful with your marketing plan. It demonstrates the customer journey, starting with awareness of your business throughout the funnel to final conversion. Understanding how it works allows you to critically analyze the data and note the areas that need improvement.

Having a distinct vision for each of the steps a lead could take through your website or business model helps to narrow down exactly what your team needs to work on to improve conversion rates. 

Do you have a high bounce rate, meaning that as soon as interested parties click on your website, they lose interest and leave? Or do they browse the products, add some things, and then back out? This is called shopping cart abandonment.

Without a sales funnel in place, it isn't easy to target the key areas that need optimization. Taking the time to put one together saves you time later searching for solutions to low conversion rates.

Sales funnel vs. buyers' journey vs. inbound methodology

With all the marketing strategies available for businesses to use, it can be difficult to know exactly where you should invest your time and money. Which path suits you best as you pursue your end goals? Some similar terms that can add confusion as you try to make this decision are "sales funnel," "buyers' journey," and "inbound methodology." What are the differences, and how do they pertain to you?

The primary difference between these three terms is the perspective that you use to look at the journey potential customers take through your business. 

The Buyers' journey is a look at the process from the buyers' perspective. They have a desire or a need for something and want that fulfilled as efficiently as possible, without much regard for the company itself. The stages of this process include:

1. Awareness

2. Consideration

3. Decision

Sales funnel. This phrase comes from your perspective as a business. It starts with someone being a stranger to the company and steadily working towards becoming customers and, finally, advocates of your business as they leave feeling satisfied. A sales funnel prioritizes each interaction with a specific business instead of a buyer making their purchase and efficiently wrapping it up. 

Inbound methodology. The inbound methodology is the broadest process, involving a hybrid mix of the buyers' journey and the sales funnel. It is primarily your marketing team's perspective, whether that be you or a separate division of your company. This process is used by inbound marketers, starting with attracting strangers to the business, converting them to customers, and influencing them to become promoters. Each step involves a specific set of tools that marketers can use to find success along the way. The process involves stages, these being:

1. Attract – strangers

2. Convert – visitors

3. Close – leads

4. Delight – customers

5. Become – promoters

2. What are the sales funnel stages?

A sales funnel functions differently along each step and ideally works to move strangers through the process smoothly to the end. There are various terms that people use to describe the steps and what people are called as they move through them, but we will use the most common terms.

There are four stages and they can be recalled using the acronym AIDA. Keep in mind that each of these phases is meant to demonstrate a prospective customer's mindset as they move through the process. Taking the steps in the wrong order gives the leads a preemptive message that often scares them off and causes it all to come to a screeching halt. 

Awareness

This first stage involves the first moment of awareness between your business and a stranger. You catch their attention. Perhaps they notice a Facebook post, a tweet, or an online advertisement that piques their interest. It could also be something less direct on your part, such as a result of their Google search. With that first interaction, a stranger becomes a prospect.

Frequently, the awareness stage represents more the beginning of a relationship than the closure of a deal. You need to begin to woo them and draw them further into your site, increasing their engagement with your business. 

Interest

As they continue to engage with your business, they should develop an interest in it. They are typically doing research into a product or service, browsing through shopping pages, or considering their options. 

This stage is when you take advantage of their need or desire for a product and offer them your aid or expertise. It is important not to begin pushing your products immediately since it will often displease prospects and turn them off from future interactions. 

"84% of 25-34 year-olds have left a website that is a favorite due to irrelevant or intrusive advertising." (Hubspot, 2020)

Decision

The decision stage involves the moment that a prospective customer changes from simply having an interest in your business to becoming ready to make their purchase. They will often be considering several businesses at once or multiple products at different prices.

This can also be thought of as the promotion stage. Make them your best offer, something that hopefully they won't be able to resist. This could look like sending over an onsite ad with a discount code, a new sale on some of their items of interest, or a bonus product if they spend over X amount.

Action

Now is the time to get people to act on their decision. They should see the offer and can't wait to take advantage of it. By taking this last action, they become a part of the business's system, integrating themselves into a pool of customers.

Some people add another stage after the action stage: retention

The idea is that you shouldn't sit back and relax after the purchase. Instead, focus on customer retention and is prime real estate for good marketers. It's when you can turn the first purchase into 100 future purchases.

Ways to do this could include a "thank you" card or communication emails to tell them more about their new product. Invite them to share their feedback once they are done and use this to continue the conversation.

3. How does a sales funnel work?

Here's an example of how a funnel structure works for someone who isn't originally looking as an interested buyer.

1. You place an advertisement for your products or services on social media outlets such as Facebook, Instagram, or Google. When clicked, this advertisement links back to a landing page for your company's website. You have now built awareness.

2. After a minute or less of time spent on the website, you have an automated message pop up that displays an incentive for people who sign up on your email list.

3. These leads continue to receive emails over the coming days or weeks and begin to build more interest in your brand.

4. You place a Call-to-Action (CTA) at the end of each of these emails. This message will vary based on your services and how you want people to engage with your business.

5. After building up some of your products and services in their head, the sales lead decides to click on this CTA. It links them to a new landing page, probably your shopping page. Here, they can interact with your products and add some to their shopping cart. They have entered into the decision stage.

6. If you haven't done so in your emails already, now is the time to take that last step and offer them a deal they can't refuse. Perhaps it is a limited-time discount or a promotional sale for certain items. You need to take them from the decision stage to the action stage.

7. They can't refuse the offer and have begun to identify with your brand, so they decide to make the purchase. After this, you can move to the retention stage. Send them automated emails that make them feel even more satisfied and happy with their purchase. These help to build brand loyalty so that they return to you for any similar purchases in the future.

4. How do you create a sales funnel for yourself?

By now, you realize how useful a sales funnel is and just how much your business needs one. It is all about being purposeful to reach your goals and examining each step it will take to get there. How do you create one for yourself? Use these straightforward steps to streamline the creation process.

Set goals

First, if you don't know where you are trying to get to as a business or company, how will you know if you are improving? Defining your goals should be a step that happens much earlier in the business's development. However, if you haven't done it yet, take this opportunity to look at your sales, revenue, and other outputs to establish achievable goals. 

You can set up two sets of goals. The first should be very achievable, numbers that will keep you in the earning category. The next set is high-achieving. These are the ones that you strive towards in order to make your business better than ever. Keep them as an opportunity to always be reaching for the stars.

Define and analyze your target market

Your goal isn't to market to everyone. Instead, you want to market to those people who will most likely have an interest in your product. An effective marketing strategy figures out who those people are and the best areas to reach them.

For example, if you sell technology products that run difficult programs for other businesses, coders, architects, and others, then you will want to market to these types of people.

The best way to develop marketing practices that work is to analyze how your audience behaves. Ask yourself:

• When do they come onto your site?

• How long do they stay there? 

• What pages do they look at? 

• What kind of content do they find the most engaging? 

• What do they click and how long do they scroll?

All of these answers can be found with analytical tools that are integrated into most website management systems. They point to what people are most interested in among all of the products and services that you offer. Then, you can begin to tailor the results to better suit their needs, enhancing the pages that people are most interested in and adding more content that enriches their experience.

This knowledge of what your target audience is interested in will also help you tailor your marketing campaign. Let them know that you have added more content or could offer them more information or products to suit their needs.

Create opportunities for awareness

Your funnel is not going to be effective at all if no one "steps" into it so to speak. Starting with awareness, if nobody knows about your brand then how are they supposed to interact with it?

Once you understand who your audience is and some of their preferences, it is time to spread the word and put yourself out there. Get your content in front of people so that you can develop more awareness and reach the appropriate audience.

Your budget and marketing scheme are going to mold how you do this. Some businesses might have a large enough following on social media through the development of their brand that simply regularly posting content across their platforms will inspire further reach. Other businesses will need to diversify. Share infographics, collaborate with other brands, start a content-driven YouTube channel.

If you have a larger marketing budget, consider spending some cash on paid advertisements. Some of the best platforms to do this are:

• Instagram

• Facebook

• Google

• LinkedIn

Think about where your target audience spends their time. The platforms themselves can then help you to put the ads in front of the right people.

Have an actionable landing page

So, they see an ad. They like what they see so they click on it, and then what?

Then, they should be routed to a landing page that directly relates to what the ad was saying. Don't try to mislead with advertising since it will turn people off quickly and you will inevitably develop higher bounce rates. The landing page should be something relevant, preferably something that leads them to very valuable content or gives them access to a can't-miss offer.

"About 96% of those that visit your website for the first time are not prepared to buy right away," according to Marketo.

Remember that if you decide to go with an offer right away, these new leads are in an early stage. Don't push them too soon. Instead, focus on captivating them, drawing them into your brand, and helping them to identify with it.

The goal of this landing page should be to steer them to "high value" areas of the website. These are e-commerce pages, pages with content that hold high interest for your audience, or pages with resources they might be interested in obtaining. It should have clear and bold CTAs so they know exactly what to do from there. Have them watch a video, direct them around the site, or download your resource.

Curate an email campaign

The next step is to continue to interact with your leads. Don't allow communication to slip to the backburner. Once they have interacted with your site for a short time, give them the opportunity to sign up for your email list.

Marketing through email is extremely valuable. Customers like to hear from their favorite brands. 

"49% of consumers say that they like to receive promotional emails from their preferred brands on a weekly basis." (Oberlo)

Use email campaigns to educate leads about your brand. Give them the opportunity to learn the information they want to know in a very accessible way. If you have found that people have certain kinds of obstacles when it comes to buying or converting to your business, address these and give them solutions in these emails.

One of the ways to do this without having to tailor messages each week to various sets of people is to develop an email drip campaign. These are set up to give people a "drip" of information after they initially sign up. They give them introductory information about the brand, the mission statement, how to interact with you, and more. 

In the end, they often feature an incredible, limited-time offer for the people that have identified with the information in the drip campaign. It is a call to action that has a higher chance of inspiring leads to act within a certain amount of time.

Foster relationships

Once all of this has been accomplished and you have converted strangers into leads and leads into customers, don't allow them to drop off the map. Many companies make the mistake of focusing on the front end of marketing and getting people's attention.

Building brand loyalty is a large part of establishing a consistent customer base instead of relying on new leads. You should be expressing gratitude for their purchases or significant interactions with your brand. Make them aware of any new sales or coupons you have available as well as your social media so it is easy for them to keep up with you on whatever platform they prefer.

Successfully creating a high-functioning sales funnel is all about terminology. As part of the creation of your sales funnel, you need to find and use the right words at each step. These keywords and phrases should help prospects move smoothly through the funnel from beginning to end. That is why sales funnel copywriting is so vital.

5. What is sales funnel copywriting?

This type of copywriting is the kind of writing that tailors the words to help meet the goal of the funnel. Each of these words matters and will be structured differently depending on where in the process someone is. They are meant to encourage people to continue to move through, not to scare them off or push too hard too soon.

This copy is an essential aspect of site marketing and takes quite a bit of finesse. Each stage has a slightly different goal, so the wording should be different. It should all work together to target a lead's motivations for being on the site and develop a deeper relationship and emotional connection with the brand. The message should inspire them, satisfy a need, or spark a response, or all of them if you are really good.

Each level needs to be tailored a little differently, so let's take a look at how to make copywriting work for you.

Copywriting for different stages of the sales funnel

Awareness stage

The goal at this stage is to turn strangers into leads, taking them from prospective, or essentially idealized customers, into a definable lead. For many marketers, the awareness stage is the most difficult. It is all about making that first contact and making it a good one.

The medium that you use is going to change the type of copywriting message that you use at this stage. You will want to adapt the text to suit. Take a look at some of these approaches for various popular marketing platforms:

1. Social media (Facebook, Instagram, Twitter)

• The short posts that are viable on the majority of social media posts need to be eye-catching and irresistible. For these, you should develop a lead magnet. 

• A lead magnet is a term marketers use to describe a free item or a small service that they give away in exchange for someone's contact details. It is something that draws people in, as magnets do. Focus on your lead magnet in these posts, telling people about your free trial, useful resource, consultation, or even a quiz that tells them something about themselves. 

• Social media posts shouldn't be wordy. It needs to be something that is visually pleasing to stop people from scrolling. Then, the words retain their attention and hopefully lead to a click-through to your landing page.

2. Blog posts

• Onsite content is effective at drawing people in through the results of their search queries. They should be suited to directly answer questions relating to your niche. This style of copywriting and content creation must incorporate best practices for SEO so that you have a higher chance of ranking.

• Once someone has noticed your outreach and interacts with it, it becomes your entry point. From here, it should begin to direct them on a clear course of next steps. They click it and it takes them to the aforementioned landing page. These pages need to be very aesthetically pleasing and draw people in, satisfying whatever reason they might have clicked on the post.

Beyond that, don't forget to add a clear-cut CTA that provides them with further opportunities to interact. If they have to search it out, the likelihood is that they will lose interest and you will have lost a lead.

Interest stage

Taking them from the Awareness stage to the Interest stage is the next part of your process. They have been made aware of your brand and now have the opportunity to interact and increase their interest. Email drip campaigns are one of the best ways to do this.

Although you can choose to trigger the request for contact information at any time when a lead is on your site, you can't wait too long and lose them or do it too soon and seem pushy. It is best to evaluate the average time spent on your landing pages. Set the contact request to pop up at about the 50-60% mark. It gives them enough time to begin to engage before the average person leaves the page.

Once you have their contact information, begin your email campaign. Don't underestimate the power of the welcome email. 

"The average email open rate is 21% whereas the average open rate on welcome emails is 82%," according to MailChimp and GetResponse.

What kind of content should be included in a drip-email campaign? You can structure it in a series or different types of content, always giving the headings constructive titles. Consider these goals when constructing these kinds of content in your messages:

• Establish your knowledge and expertise in your niche

• Get them to engage with the site again by offering their feedback or taking an interactive quiz

• Overdeliver on promises so that you can build trust

• Educate them about your brand and show how they can relate to it

Be sure to construct the email in short, scannable paragraphs. Doing so will increase the likelihood that they will read it. Put your most interesting material at the top of the email to get people interested. You can also feature testimonials, accolades, or reviews at the bottom to further promote your expertise and build trust based on previous customer satisfaction.

Decision stage

The copywriting for the decision stage involves more CTAs than in other stages. They should inspire people to take that last stage of action. It is essential not to do this too early. The timing is based on how big of a purchase you want them to make. The larger the purchase directly relates to more time curating trust in the relationship.

Once that relationship is built, you can use the final email in a campaign to spur them into action. It should have a sense of urgency behind it, such as a sale that is being offered only for a limited time.

If they click through, give them a page experience that shares the same branding and aesthetic as the email to create a seamless experience. Give them only a few options so as not to overwhelm them. 

On this landing page, you should continue to stress the urgency or scarcity of the product that was advertised in the email. Give them comforting messages about the flexibility of your return policy or the viability of your trial period. It helps them to feel like they have security to fall back on.

Action stage

Copywriting at this stage doesn't have to be bulky, but it does still create opportunities. After they make the purchase, give them a satisfying thank you page and send out emails expressing gratitude. These should be geared to ward off potential buyer's remorse. Welcome them into the community and make them feel like just scored with their purchase.

Loyalty/retention stage

Forming a consistent client base is one of the best ways to streamline the steps. You circumnavigate the first step and continue to develop interest and brand loyalty.

From this point, treat the customers to language that makes them feel like a valued member of the business's community. Give them a chance to leave feedback and become believers in the brand. Your sales will benefit from selling to existing customers much more than putting your whole focus on developing new leads.

6. Funnel optimization: how to improve your sales funnel conversion rates

Creating a sales funnel and integrating it isn't a one-and-done process. Instead, you should constantly work to improve it by keeping track of its success metrics. From beginning to end, you need to keep the data to analyze the progress of your funnel. Track how many people are entering the sales funnel, conversion rates at the end and throughout the sales process, the average dollar amount someone spends, and how long it takes them to become a buyer.

Important sales funnel metrics to know

1. Amount of entrance

The amount of entrance places a specific number on the number of people that enter into your sales funnel during a given period of time. Once enough data is gathered, it can also be used to project future entrants and further growth statistics along your funnel.

2. Conversion rates

Overall conversion rate

There are two kinds of conversion rates to track. The first is the overall conversion rate, the number that shows you how many people travel all the way through your sales funnel to become buyers. You can measure this metric by creating a ratio of the potential customers at the entrance to converted buyers at the end.

In-process conversion rates

First in-process conversion rate (CA)

Previously, we talked about the four primary steps through your sales funnel. The first in-process conversion rate applies to the Awareness stage. It quantifies the number of people that are made aware of your business when your marketing team advertises.

Second in-process conversion rate (CI)

The conversion rate at the Interest stage of the process shows you how many of those that are now aware of your business has an interest in it. If this number is low, it tells you that you need to change the audience your advertisements reach.

Third in-process conversion rate (CD)

The next are those people who do have an interest that begin to have a desire in converting to a buyer from your business.

Fourth in-process conversion rate (CB)

The final in-process conversion rate measures the leads that turn the desire into action and become a buyer.

3. Average sale

Simply put, this is the average amount of money you make from each buyer that makes a purchase after acting on their interest and desire. This metric alone demonstrates the enormous value of a sales funnel. If the average sale is too low, use the visualization of the steps to improve your sales and increase that average sale, thus exponentially increasing the profit margin for your business.

4. Extent of the process

If you have a high-functioning sales funnel in place, then it will move leads through each one of the stages smoothly and quickly. This metric expresses the average time that it takes during the sales process for one potential customer to go from a lead to a buyer. If it takes too long, you are losing out on money and resources and the sales funnel needs to be shortened through improvements.

The two metrics that must be improved constantly in a sales funnel

Although all of these metrics are important to keep track of while working to improve the process, there are two to constantly improve: the amount of entry and in-process conversion rates.

Increasing the amount of traffic at your entry points should directly increase the number of strangers that are converting to leads. Your "amount of entry" goes up because you have more people coming in through those entry points. The only way to get people in through an entry point is to create one through marketing.

Putting a good marketing strategy in place to reach out to more strangers and turn them into leads gets more people at the top of your funnel. Theoretically, the more people that enter the funnel at the Awareness stage, the more that come out the other side as buyers. Continuously evaluate the viability and placement of each one of your entry points, things like advertisements or blog posts. If they are not generating the kind of interactions they should, then something new should be added.

Since there are multiple conversion rates throughout the system, take the time to examine each one closely. If there is a large drop-off from one to the next, then you need to focus on improving that in-process conversion rate. 

For example, analyzing CA would mean looking at whether your entry points are being used, whether people are aware of your business and your products. If not, increase your visibility.

Examine CI if there are plenty of people that are coming through your entry points but do not develop an interest in your business. It might be that you are targeting the wrong audience or that your advertisements, aesthetic, or coupons are not hitting the right spot.

At CD, if an interested lead gave you their email or spent plenty of time searching through your product page, then leaves and never comes back, there is work to do. Send them emails that educate and intrigue them regarding your services and products. Continue to raise their interest until it becomes a desire for your product.

Finally, at CB, if they never act on the desire and become a buyer, you need a better clincher. Customers that are at this step of the funnel should be given a reason to buy, a limited time offer, or a sale "while supplies last."

Conclusion

By creating an effective sales funnel visualization and observing the metrics after its integration, you get a much more complete idea about where your business exceeds and where it falls behind. It takes away the guesswork for your marketing team and provides clear answers and solutions.

If developing a sales funnel still seems overwhelming, the copywriting portion isn't your forté, or it all seems difficult to optimize, there are marketing experts and skilled independent copywriters to help. Developing a marketing team often starts with simple steps that lead to a cohesive group working together to set up successful structures you can use to watch your business flourish.