What is a Sales Funnel?

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You know those things that are wide at the top and narrow at the bottom so you don’t spill stuff? That’s a funnel. A sales funnel is where potential customers enter through the wide top of the funnel and come out as paying customers at the end of the funnel. Unlike a literal funnel, with a sales funnel, you’ll lose people on the way down. (And that’s ok!) Not every person is your person when it comes to business.

All businesses employ a sales funnel in order to get paying customers, whether they know it or not. Being aware of the funnel is essential in order to control it so that you can optimize it. This allows you to test it and make it better, allowing you to generate more paying customers and revenue.

Not all sales funnels are created equal, but let’s take a closer look at some funnel basics, starting from the top.

The First Stage: Awareness

In the very beginning, you’re starting at zero. At this point, you want people to become aware of your business or the problem you are solving. There are a variety of ways to do this! (Think blogging, networking, social media, advertising, SEO, etc.)

Now a person doesn’t just enter your sales funnel because they’re aware of your brand—you’ve got to actually “capture” them. Traditionally, we do this by gathering an email address so we can continue to nurture the lead and move them down the funnel towards a sale. However, as digital marketing has evolved, new ways of capturing a lead have emerged, like Facebook chat bots.

The Second Stage: Acquire

Now that we have their attention, we’re going to send your prospects to a landing page. In order to entice people to move to the next stage of your funnel, you need to provide them with value or the promise of a lot of value. Most consumers have smartened up, so you need to ensure you have an excellent offer.

We call this offer a “lead magnet” because it draws in your lead. You can offer a free eBook or free course as a lead magnet in exchange for their contact information—usually an email address. Truly, the options for a lead magnet are endless, so get creative!

In this stage, the goal is to acquire the lead formally by getting them interested enough to enter themselves into your ecosystem.

The Third Stage: Nurture

Now that you have their attention in a much more tangible way, it’s time to nurture that lead. At the very top of the funnel, you piqued their interest. Now you must prove to them that you know your stuff.

There are a lot of funnels out there! And lots of people who offer very similar products or services as you. This is where you get the opportunity to really stand out. More than that, this is where you get to gain your lead’s trust.

Teach them. Tell stories. Show them who you are. Bring value without asking for anything in return. It’s important that you create emails people actually open, read and click through. This will likely require a bit of A/B testing, but is well worth it.

It’s important to note, however, that sales funnels are not just from landing pages; a person can enter your funnel in a myriad of ways. You may have captured a lead on your website who wants a demo, exchanged their phone number for a follow up call from someone on your team, or even a business card from someone at a conference who is interested in working with you. The nurture stage remains the same here; you can still automate emails for it if you focus on talking with your lead instead of talking at them.

The Fourth Stage: Action

We’re getting to the bottom of the funnel now, and you can see the light at the end of the tunnel. Those leads you captured are warm. You’ve made them aware of your business and the problem you solve. You’ve taken the time to nurture them, answer their questions, and become an authority figure in their eyes. You’ve built trust and set the foundation for a deeper relationship.

Now it’s time to sell stuff.

This is when you can officially present your paid offer and convert that lead into a customer. If they don’t bite the first time, continue to nurture them! Timing can be incredibly important in making a sale, and just because a potential customer reached the end of your funnel doesn’t mean the timing was right for them.

Remember: this process is never about you! Your sales funnel gives you the opportunity to build rapport with your leads, so if you don’t make the sale, seperate those leads into a new segment and prepare to start nurturing them all over again.


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Meet the Author: Shauna Armitage

Shauna is a Marketing Director or Fractional CMO helping early-stage startups scale with effective strategies, creative solutions, and unparalleled integrity by making the most of small budgets for maximum impact.

As a vocal advocate for women in business, Shauna is on a mission to redefine what it looks like to be a working woman and to support other women doing the same. She spends her free time traveling with her husband and four kids while drinking Coca-Colas. Connect with her on Instagram at @shauna.armitage.


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