What is a Sales Funnel and How Does it Work?

Sales Funnel


A sales funnel is an excellent tool for determining what went wrong with your marketing strategy. Often times marketers spend weeks crafting what they feel is the perfect campaign only to have it wind up producing a low conversion rate.

Continue reading to find out more about sales funnels and how to create one for your business!


Sales funnels are basically a simplified representation of a customer’s progression toward making a purchase. It is a marketing concept that helps businesses in tracking the sales path that their potential buyers take.

It helps in determining what is working and at which point you are losing them.

At the top of the funnel you have all of your potential buyers. As you move down the funnel towards the middle.. along the way some of your prospective buyers make the decision to decline the offer.

The number of interested prospective buyers has now decreased as this lesser number of prospects continue on down the funnel.

In the end.. the prospects who have maintained their enthusiasm and have made it all the way to the bottom of the funnel now have to make a decision. Some of these prospects will turn into buyers.. while others may decide not to make the purchase after all.


As simple as a sales funnel may appear.. every detail within the funnel provides key information to your organization. When you divide the stages that potential customers go through.. you have a better chance of understanding how they think.

Besides.. tracking prospective buyers’ behavior provides extremely valuable insights into your current marketing strategy’s shortcomings. In other words.. it draws attention to the areas where potential customers are highly engaged as well as to other areas where they tend to lose interest.

This serves as a guide in deciding where to focus your efforts and funds. Without such an informative structure.. businesses risk diverting their resources away from the core issues.



Let’s take a closer look at how sales funnels work. It is made up of four major stages that prospective buyers follow from the moment they see your product.. until they decide whether or not to buy it.

1. Awareness:

A prospective buyer’s sales journey begins with brand awareness. People are only now becoming familiar with what you have to offer.

A variety of contexts can lead to customers becoming aware of your products or services.
For example.. they could have seen one of your social media ads or simply heard about your business from a friend. Alternatively.. they may have been actively looking for a solution to their problem when your website showed up.

There are countless scenarios which could generate a sizable pool of potential customers into the sales funnel.

2. Interest:

Now that potential buyers are aware of your company’s offerings.. they will need to evaluate their need for them.

Prospects will try to learn more about your products or services.. as well as compare them to others on the market. If your marketing game is on point.. you’ll successfully pique their interest. During this stage it is important to add the wow factor rather than push a sale.

In other words.. this is when customers consider how your company can help them and what distinguishes you from your competitors. Thus.. it is best to establish trust before directing them to purchase what you’re offering.

3. Decision:

At the decision stage.. potential buyers weigh their final options against one another. They’re now double-checking the details one last time before settling on one option and making a purchase.

Consequently.. this stage should include a competitive offer to increase the likelihood of prospects converting. This covers promotion ideas such as discount codes, (BOGO) buy one get one free and so on.

4. Action:

The action stage concludes the sales funnel. This is where the potential customer will decide whether or not to proceed with the purchase.

If they did.. it is time to work on retaining this customer. If they didn’t.. you’ll need to ensure they remember your brand.. by sending them informational or promotional Emails for instance.


To create a sales funnel for your company.. you’ll need to go through five key steps:

1. Define Your Target Audience:

Spend some time defining and understanding your target audience. This is the stepping stone to developing an effective sales funnel tailored to your customers’ needs and buying behaviors.

When you learn more about your target audience.. you’ll have a better idea of what content will pique their interest and what won’t.

2. Create a Captivating Landing Page:

After you’ve created content that appeals to your target audience.. it will be time to build a landing page.

This is the first page that potential buyers will see about your business after clicking the call to action button on your ad. That’s why it must be compelling enough to boost the chances of prospects converting into buyers.

It would be a great idea to give visitors something in exchange for their Emails. This ensures that you can reach them even if they don’t complete the purchase this time.

3. Work on Lead Nurturing:

Lead nurturing is critical at all stages of the sales funnel. Simply put.. it is the process of establishing and maintaining customer relationships throughout the sales cycle.

This is typically accomplished through a variety of routes.. including Emails, paid re-targeting, social media, etc. Whatever route you choose.. make sure it offers something unique that will entice customers to return to your website.

4. Follow Up with Customers:

By now.. you should have a mix of potential buyers who converted and those who didn’t. Maintain constant contact with both new and existing customers. Send them an Email asking for feedback or a coupon for their next purchase. This will help to keep them engaged.

For prospects who haven’t converted yet.. sticking with lead nurturing tactics is your best bet.

5. Evaluate the Final Results:

As you follow the steps outlined above.. you’ll collect valuable data along the way. You’ll have numbers and facts to show which approaches worked and which didn’t. As a result, it’s essential to evaluate the final results and make the necessary tweaks to increase your conversion rate.

Wrapping Up:

What gets measured gets managed.. and sales funnels are a great way to assess a customer’s sales path. The way they work and the data they provide undoubtedly assist businesses in meeting their objectives more quickly.

Just remember to build your sales funnel around your target audience for optimal results.

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