The Definitive Guide To Sales Funnel (December 2020)

As I explained in layman terms what a sales funnel is with the help of a very simple analogy from real life on this post, I felt that more should be written on that. In this post I’ll try to explain every happy angle of a sales funnel and also how you can create one or improve your existing sales funnel.

What is a Sales Funnel?

First things first, sales funnel or purchasing funnel (the term, ‘sales funnel’ will be used throughout from here on) is a marketing concept from 1898 by a man named Elias St. Elmo Lewis that describes the various stages a buyer goes through when making an actual purchase. Lewis used the short slogan, “Attract attention, maintain interest, create desire” to guide the marketers on what tactical approach to use to compel an eventual buying decision. A lot of time has flown since then but the classic AIDA-approach which is fundamentally the description of the different buyer stages has stood its ground firmly.

As for definition, we can say that a sales funnel is “a consumer-focused marketing model that illustrates the theoretical customer journey towards the purchase of a good or service“.

A simple sales funnel
A simple sales funnel

Why is a Sales Funnel Important?

The goal of any business is to make sales and profit. A sales funnel effectively guides you on what to do on each stage of a buyer journey to ensure a successful sale. The sales funnel will vary according to the nature of each business and the goods or services it offers. For example, sales funnel of a giant like Barnes and Nobles and sales funnel of a small local bookstore will be distinctly different though both of them are competing in the same industry. By properly understanding your own unique funnel, you’ll then have the opportunity to analyze your sales process and find the little nooks and crannies where you can improve.

Stages through a Sales Funnel

Sales funnel looks like an obvious funnel or an inverted right-angled cone where the top is the most extended portion, followed by a smaller but longer middle portion and a much much narrower bottom. What this means is that there are more people who first get aware of your brand and then by getting to know it better some of them are now interested. A number of these interested persons will eventually start desiring for your product and a few of them will continue on to make the final purchase.

  • Awareness: This is the first stage through the funnel. Here your prospective customers aren’t yet aware of your product or brand. So the main task is to increase your visibility, think of advertisement.
  • Interest: When people start to understand what you’re offering to them, you need to maintain their interest. This happens at the second stage of the funnel. Interest can be grown by showing detailed features and benefits of what you’re offering. Not every product is a physical one which can be summed up in features and benefits. For them you can always show how they’ll solve your customers’ problems or make their lives better.
  • Desire / Decision: If you’re successful in describing the many features or a perfect solution to the problem your customers are having, they’ll then desire what you’re offering or make a decision to buy. Usually in this third stage you can further entice them with a value discount or a trial.
  • Action: The fourth and the most happy stage for you, the seller. Here, the customer has already made his decision to buy from you and purchases your product. But making the sale is usually not the last stage. Maybe you have something else that can help him now or in future? Maybe you want to make sure that he comes back to buy from you? Maybe he can refer your product to his friends and relatives? Following up with the customer is something that can’t be overlooked.
  • REPEAT: Keep on repeating these four stages of your funnel for all of your customers.

A Sales Funnel in e-Commerce

A funnel in an e-commerce operation may look like this:

  • Visitors to Site: These are the people who are made aware of your happy little site and decide to pay it a visit. You may’ve heard the phrase “widen the funnel” which basically means attracting more visitors to your site. Widening the funnel always increases the scope for making more sales. So inbound marketing, reaching out to new prospects or advertising can help increase your brand awareness.
  • Product Page View: Not all the visitors will view your product pages but now you already know that. Similar to the interest stage, your job is to make the ones that do to hang around longer. Make the product page as interesting as you can; the goal is to increase their time-on-site.
  • Adding Products to Cart: In an e-commerce platform, adding products to the cart doesn’t necessarily mean that they will be bought for sure. In fact, “roughly seven out of every 10 shoppers won’t complete their transaction”. You can still aim to better your conversion rate by showing them similar items but maybe with lower price or with better features. You can also show them other products which were bought by other people with similar items on the cart. In other words, nudge them along the right path where they’ll feel more comfortable in buying from you.
  • Payment & Purchase: About 5% of your site visitors, if everything along were smooth, will make the final payment and buy the items on their cart. Here also you can make the experience better by giving them plenty of options to pay like COD, credit / debit card, other payment gateways such as PayPal, GooglePay etc. Moreover you need to make sure that the payment process isn’t overly complex. Sending a well-written thank-you mail after they purchase from you seems like a small thing but that also does wonders.

For the rest of this post, I’ll use sales funnel as used in the e-commerce sector only.

Components of a Good Sales Funnel

We have already covered the various stages that a customer goes through while in a sales funnel. Now let’s look at the structural aspect of a good sales funnel in an e-commerce environment.

Landing page

Landing page is where your visitors “land” after they click on your ads, links from e-mails etc. This is a static webpage on your site with the sole aim of capturing audience or prospective customers for your site. It could be any page of your site but keep in mind the aim of a landing page, to convert visitors into customers. This means that a good landing page always has a Call-To-Action or CTA, maybe a button to purchase something, signing up for newsletter services or registering for something like an online course.

It is sometimes very easy to confuse a homepage with a landing page but again keep in mind the original purpose of the landing page. A homepage may have all sorts of links to easily navigate your site but a good landing page has only one clickable link that then converts the visitors into customers. Having a good landing page thus greatly enhances your conversion ratio.

Lead magnet

No matter how great it is that you’re offering your visitors, only about 2% of the first-time visitors will purchase something from you. A lead magnet is something you offer for free. “FREE” is probably the most powerful marketing term in existence. Even someone who won’t get much use from what you’re offering is enticed when he sees the F-word. The goal of your free offer i.e. your lead magnet is capturing e-mails from your visitors.

You can give a well-written ebook or case study or guide for free to your visitors in exchange for their e-mails. There are no single lead magnet strategy for universal use. For example, a cosmetics company may offer samples for free as their lead magnet while a software company may give out free trials and an upcoming author may offer the first 10 pages of his book to read for free.

The most common mistake while creating a lead magnet is to compromise on quality. Quality of the lead magnet should never be mediocre just because you’re giving it for free. Your ultimate aim is to arouse the interest of your visitors so that they come back for more.

An illustration of a lead magnet
An illustration of a lead magnet

E-mail nurture system

E-mails still are the most valuable asset for your e-commerce site. Let’s be honest, there are whole dedicated list of strategies on how to use e-mails effectively, separately called e-mail marketing. In fact, a standalone funnel can also be created only by using the e-mail system. But let’s not go into that right now as we are focusing on the role of a good e-mail nurture system within a good sales funnel in use.

Think of the stages a customer goes through within the sales funnel in the broader sense. You have made them aware and interested through your landing page and your lead magnets. Not all of them will become your customers right away. That’s why you’ll need to nurture them by following up with a relevant series of e-mails. You’ll want to maintain their interest and help them to take the purchasing decision in future.

Maybe you can mail them some other products other than what your landing page is promoting, maybe you can provide them lots of information on how to solve a particular problem your other customers are having, maybe you can notify when you’re offering a discount or price drop. The goal of the e-mail nurture system is to maintain a steady relationship with your future customers as well as your existing ones.

Social Media Engagement System

E-mail nurture system is a proven sales funnel strategy to maintain the interest level of your visitors and even to persuade them into coming back to your site when done right but still all that seems a bit of one-way-communication. Various social media platforms like facebook, twitter and instagram can help your visitors engage with you in real time. Social media marketing is soon becoming an inherent part of e-commerce sales funnels.

Creating a Sales Funnel

Now that we understand each stage and each component of a good sales funnel, let’s look at how we can create an effective sales funnel for an e-commerce platform. Each of the steps is a large field of study in themselves. For keeping this article within sane length, I’m gonna briefly touch on them. For now.

Buyer Persona Analysis

Buyer persona is a detailed description of your target audience. Let’s say you’re selling affordable smartphones without compromising on camera quality. Your buyer persona then can be:

  • college-goer / just starting his or her first job
  • between 18-23 years of age
  • uses smartphone more than his or her laptop or desktop
  • has some disposable income
  • willing to sacrifice heavy gaming for good quality selfies
  • somewhat impatient to search around for other smartphones till his or her primary pain point has been touched

You get the idea? It’s always advisable to draw up as many characteristics this buyer persona may possess by conducting a detailed survey consisting of questions asking about general demographics, work, daily routine, buying habits and of course pain points.

Grabbing the Attention

This can be done mainly through the content in your site and the ads you run. About the content, be creative and play around to find what works. One suggestion will be to use as many medium to get your message across- words, images, audio, video, infographics and anything else. You’ll want to always be on the center of attention of your visitors. Also integrating video, audio and captivating images on your site will make them stay longer.

Paid marketing campaigns or ads have been in use since ancient times. They still can do wonders for your business if done right. Try to always keep them simple, persuasive, sentimental, easy-to-remember and above all, TRUE!

Always remember that your goal in this stage is to attract as many visitors to your site and hold their attention, regardless of your buyer persona. A good reach will always help in converting more and more of your visitors to your customers.

Creating a Landing Page

In the next step, you’ll need to create an attractive landing page based on your buyer persona. While creating the perfect landing page, keep in mind the following:

  • A compelling headline that your visitors won’t be able to ignore, write subheadings if and when applicable but always keep them short
  • A clean and simple design
  • A clearly defined objective for your landing page, be it filling out a form, registering for a newsletter, downloading an ebook / guide or purchasing a product
  • Trust signals or trust badges that show your visitors the trustworthiness of your site. Testimonials, certificates or other credentials can be good trust signals to use.
  • Mobile-friendliness
  • Different versions of the landing page for visitors coming from different sources
  • A/B testing ( More on that later)

Creating a Compelling CTA

Yes, CTA is a part of the landing page itself. Yet I’m separately emphasizing it because well, it’s that important. A good CTA will be:

  • starting with a strong command verb
  • using a lot of power words, words that trigger emotion
  • motivating to take the designated action
  • using sales and promotional offers during say a festive season
  • including pricing information whenever applicable, in order to getting a better conversion ratio

Building an E-mail Nurture System

The importance of having a good e-mail nurturing system was explained before. To build an effective e-mail nurture system,

  • mail your visitors relevant, no-nonsense content
  • try to focus on targeted content for each of your buyer personas
  • use a multi-channel approach by combining e-mail marketing with video, social media or even direct sales marketing
  • follow up in a regular but unobtrusive manner
  • always add some sort of personal touch to individual e-mails
  • do not send too many e-mails, ideally one or two mails per week will be more than sufficient

Retain Existing Customers & Repeat

Many people tend to think that the goal of a functioning sales funnel is to generate new leads. But the perfect sales funnel will generate new leads, increase conversion rate and retain your existing customers all at the same time. Remember that those who once bought your product will be among the very first to buy from you when you’ve something new to offer. For retaining your existing customers,

  • listen to them and always keep an open communication channel
  • educate them about the value of the product they’ve bought from you
  • build a brand image that appeals too much to forego, in other words cultivate brand addiction
  • try to engage them in a fun way to you, business doesn’t have to be all serious and dull

Once you’ve got the perfect funnel ready to serve you, only thing that you’ll need to do is to continue repeating the same process over and over. Also a business can have multiple sales funnels for multiple defined goals. So repeat, repeat, repeat. (Ah, now I’m repeating too!)

Optimizing Your Sales Funnel

You’ve built your sales funnel and are prepared to repeat the steps described above. Here are a few important things to remember when trying to optimize your sales funnel:

Optimizing Ad Campaigns

Ad campaigns are necessary for giving your brand the visibility it needs. A perfect ad campaign will be:

  • aligned with your objective
  • focusing on profit first
  • always aiming to convert more clicks
  • timed for better chance of getting noticed
  • targeting mainly your buyer persona
  • using high performing keywords
  • suitable for adaptation after intense analytics

A/B Testing

A/B Testing is “showing two variants of the same web page to different segments of website visitors at the same time and comparing which variant drives more conversions”. This can be done with regard to finding your perfect landing page, ad campaign, lead magnet strategy and pretty much with everything else. Some brainstorming needs to be done beforehand to find the closest competitors for your A/B Testing. A/B Testing should be:

  • based on thorough research
  • about first finding as many variants as you can for your control sample ( the one that is in current use is called control and the options to probably replace it are variants)
  • used to find the perfect choice for you with regard to your ad campaign, design and layout of your site, what type of forms can you use, finding the right CTA or the landing page and basically everything else that you can think of. The point is don’t limit A/B testing on one aspect of your site and leave it be for everything else
  • never be tested with too many options at once; ideal is to find the two closest competitors and then test them out
  • free from your personal, emotional choices; always respect what the numbers are telling you

Analyzing Results

That last point brings us to the analytics portion of making sure that your sales funnel does your job as efficiently as you want it to. There are some important sales funnel metrics that you need to focus on in this regard:

  • How many people are entering the funnel
  • How many of them are becoming customers
  • How much revenue you’re getting from the conversion
  • What’s the average order value of your customers
  • How much time it takes for customers to move from one stage of the funnel to the next
  • How many people are jumping straight to the end of the funnel

Like with everything else on this planet, numbers usually tell the greatest truths. Keep an insightful eye on them, and think about what they may actually mean. You’ll find areas where you can hugely improve your existing funnel then.

Analysis is a very important tool to maintain a sales funnel properly
Never underestimate the numbers!

Sales Funnel Management (Jedi Mind Tricks)

You may have built a sales funnel but chances are that you’re still losing your customers without any idea why. That could be due to a poorly managed sales funnel. In fact, a properly managed sales funnel will reveal to you certain key insights into what’s going wrong. It’ll tell you whether it’s because of bad tactics, price points, a less than efficient CRM tool or just a bad lead. There are a lot of things to cover in this regard and maybe I’ll write a separate post on that later. For now, let’s look at how to think like a Jedi when managing your sales funnel:

“NO” Means “Maybe Later”

Sometimes even your ideal buyer persona can end up buying nothing from you. This can be due to a lot of reasons, most of them out of your control. Maybe he just went through a personal tragedy, maybe something like a low-scale recession is affecting his industry, maybe he’s bookmarking your website because he has already decided to buy from you but just not yet. Just don’t treat the ones that don’t convert as cold cases. Ask for their e-mails, engage with them, try to find out their problems and patiently continue to look for ways to solve them. You never know who’ll end up buying a huge chunk of your offerings one day.

Following Up With Those Who Buy

Same type of mentality should also go with the ones who convert. Closing a deal is not an end in itself. You’ll want them to keep coming back to you from time to time, checking whether you’ve anything else to offer them. One other important thing is to convert your customers into your fans, who’ll shout about how you’ve solved their problems to their friends and relatives, potentially bringing in new customers for you. Start a culture of accepting them into your own happy little place, updating them about the new features of the products they’ve bought, showing them how you’re working diligently to make them even better.

Right Message At Right Stage

The goal of having a sales funnel is to identify what stage your buyer is in and how to move them to the next. Sit with your marketing team to brainstorm about what messages to send them at each stage of the funnel, maybe even different ones for different buyer personas. The right message will move them to the next stage but the wrong one will also put them off.

Jedi CRM

It’s so true that building, maintaining, managing and optimizing your sales funnel/(s) is a lot of hard work. That’s why you’ll want the best CRM tool to give you the exact data you want on your customers, organized perfectly for you to access and assess later. I’ll write about how to chose your CRM tool in a separate post and include the link in here.

Tools To Use

As you’ve already guessed, monitoring and maintaining all the steps in the sales funnel is quite a job. But there are some excellent tools that can help you monitor and automate most of your tasks.

ClickFunnels

From landing page to individual sales pages to payment gateways – ClickFunnels can manage almost all your worries. Moreover they also give a free 14 day trial to their customers.

Key Features:

  1. Drag & drop page editor
  2. Quick to build sales funnel
  3. E-mail & Facebook marketing automation
  4. Option for 1-click upsell
  5. Multi-channel follow-up funnels

Systeme.io

With a price as low as 27$ per month, this is an affordable yet powerful one-stop solution for all your marketing needs.

Key Features:

  1. Unlimited sales funnel builder
  2. Built-in e-mail autoresponder
  3. 1-click upsell
  4. Dropshipping services

Leadpages

Probably the easiest solution to creating high-converting landing pages, pop-ups, alert bars with the highly useful feature of built-in delivery system for your leads.

Key Features:

  1. Drag & Drop Interface
  2. Built-in delivery for all your leads from one place
  3. Excellent page load speed
  4. Huge collection of conversion-optimized templates
  5. Outstanding customer support

Kartra

Another of the suite tools that offers an extraordinary range of features. This is not only for your sales funnel purposes but as a all-in-one marketing tool.

Key Features:

  1. Attractive payment gateway checkout forms
  2. Drag & Drop page builder with hundreds of professionally designed templates
  3. A holistic approach to managing your sales funnel
  4. Membership portal builder
  5. And Many Many More!

Unbounce

The specialist in landing page building. Hundreds of attractive templates to chose from, the ease of use, their very own Smart Traffic AI-powered optimization and testing – this is one of the sweeter deals for sure.

Key Features:

  1. Drag & Drop builder for landing pages
  2. Popups and sticky bars
  3. Conversion-focused templates
  4. An optimization algorithm called “Smart Traffic” that increases the average conversion rate by 20% compared to A/B testing

SUMO

The specialist in e-mail marketing. That too by providing most of its features for free for 10000 e-mails per month. Free version doesn’t provide A/B testing and offers stats for mails and forms for the first 30 days only.

Key Features:

  1. Visitor targeting (Advanced in the paid version)
  2. Fully customizable opt-in forms
  3. Unlimited subscriber support
  4. 1-on-1 onboarding

Thrive Themes

“Building a website, sales funnel, email list, scarcity campaign, online course…can be close to impossible if you have to cobble together all the pieces.” That’s where Thrive Themes comes in with their “ecosystem of conversion-focused tools”.

Key Features:

  1. Full suite of conversion-focused WordPress plugins and Thrive Theme Builder
  2. Over 200 fill-in templates to use for creating your landing pages
  3. A/B testing from within your WordPress dashboard!
  4. Drag & Drop lead generation tools
  5. Dynamic countdown timers, NEAT!
  6. Testimonial collection and management system
  7. And a lot more!

GrooveFunnels

From the creator of Butterfly Marketing (the second million dollar launch in online marketing history), WebinarJam, Everwebinar and Kartra, Mike Filsaime’s GrooveFunnels is all set to rule the online marketing world. It is a suite of software applications to build and maintain your sales funnels and websites, with a landing page creator, a shopping cart provider, an email marketing tool, upcoming webinar and members only courses. Basically you won’t need anything else, literally, other than GrooveFunnels for anything related to your online presence! Moreover, they are providing FREE LIFETIME account for their GroovePages (Page Builder) and GrooveSell (Sales Funnel Builder). The deal can’t get any sweeter than this!

Key Features:

  1. Website builder
  2. Page builder
  3. Sales funnel builder
  4. Sales and affiliate platform with a marketplace
  5. E-mail marketing tool
  6. CRM
  7. Video platform
  8. Webinar platform
  9. Members only area
  10. Integration with other industry leaders for all your online marketing needs, for life

Last Words

A business is not about throwing random hook lines all around and hoping to reel in a good catch, again and again. If you believe you can target the type of customers you want, help them make a purchase decision and eventually but definitely turn them into your fans then the place to start improving upon is your sales funnel. Hope this post clears some doubts you were having, gives some useful information or motivates you to build or improve your own sales funnel/(s). Please let me know if there are some things left out.

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