What Is a Sales Funnel? The Complete Guide

What Is a Sales Funnel? The Complete Guide
  1. What is a sales funnel?
  2. What are the stages of a sales funnel?
  3. How do I create a sales funnel?
  4. Why is a sales funnel important?
  5. How to fix your sales funnel.

What is a sales funnel?

A sales funnel (also known as a revenue funnel or sales process) refers to the path customers follow on their way to becoming a customer. Steps in the sales funnel include top of funnel (TOFU), middle of funnel (MOFU), and bottom of funnel (BOFU).

What does a sales funnel do for you?

A sales funnel makes it easier to follow up with leads. With a good follow up process, you can avoid the worst feeling in the world – just missing a sales opportunity. You know when someone stops replying to your emails and doesn’t pick up the phone? You can avoid that.

Why does this happen? A couple of reasons:

  • Disorganization: You don’t have your sales follow-up steps outlined, and leads get confused (having ideas in your head doesn’t count as a plan).
    Outdated tech: You don’t have the tools to make the process smooth for yourself or for the person you’re talking to. When the process is confusing, a lead’s interest in talking to you tends to wane.

Instead of just missing out on sales you know would benefit from your product, you can use an automated sales funnel to track leads and know exactly where they are in the process. That way, you know the content that they need at every step leading up to the fun part – the conversion.

And the tools in a funnel – like marketing automation – carry them through each stage so that you don’t have to watch their progress every minute of the day. The dependability of a sales funnel means that leads don’t slip through the cracks.

People recognized the need for an organized sales funnel way back in the 19th century.

In 1898, E. St. Elmo Lewis created a model that outlined a theoretical customer journey – from the moment a product caught consumer attention to the point of purchase. St. Elmo Lewis’ idea is often referred to as the AIDA-model, an acronym which stands for Awareness, Interest, Desire, and Action.

The connection of the funnel model with the AIDA concept was first suggested by William W. Townsend in 1924. And the sales funnel was born.

There have been a lot of other names for a sales funnel in its history, including:

By any name, a funnel is composed of marketing, sales, products, buying, and conversions – AKA all of those terms.

What are the stages of a sales funnel?

There are four stages of a sales funnel: Awareness, Interest, Decision, and Action. These sales funnel stages are referred to using the acronym AIDA.

arg1tj0 aidafunnelA typical sales funnel model.

The 4 stages fall into 3 general categories:

  1. Top-of-Funnel: How will people find you?
  2. Middle-of-Funnel: How will people learn about you?
  3. Bottom-of-Funnel: Why should people buy from you?

How does a sales funnel work?

The AIDA sales funnel model works like this:

  1. Awareness: Awareness is when you create brand awareness for your business. You build curiosity and awareness through content that highlights your business as the answer to a problem.
  2. Interest: Interest is when you generate interest in the benefits of your offer. At this point the customer knows a little about you and is actively expressing an interest in your product. You need to keep their interest piqued.
  3. Decision: Sometimes also called “Desire,” this is where a customer’s journey turns from wanting a fix to wanting you as their fix. You’ve made them curious, you’ve kept them interested, and the combined power of those stages leads them to decide on you.
  4. Action: In the Action stage, your call-to-action (CTA) brings the customer to act on their decision- The action stage is where conversions happen, whether that’s moving from a free trial to a membership, buying a product, or signing up for a subscription.

Ryan Deiss, co-founder of Digital Marketer, describes the sales funnel as a multi-step process that moves prospective browsers into buyers.

1vmkno72 image2019 07 12at10.40.52amRyan Deiss, co-founder of Digital Marketer. (Source: Forbes)

In each of the sales funnel stages, there are email warming sequences that have content like:

  • Personalized customer stories
  • Platform tutorials
  • Product suggestions

These happen over days or even weeks, because most prospects are not ready to buy from you at first glance, especially if they’re only just becoming aware of you. Thus, the funnel has several customer relationship-building “touches” that happen in each stage.

How do I create a sales funnel?

You create a sales funnel primarily with two things:

  1. A sales pipeline
  2. Automated email sequences

What is so important about these two components?

A sales pipeline is the nerve center of your conversion strategy. It gives you a literal, organized view of your each prospects progress through your funnel. In each stage, you send automated emails, make phone calls, and schedule appointments. You can create multiple pipelines to reflect the customer journey with each of these steps.

Automated email sequences are campaigns that send relevant information to keep a person engaged – and you can create automations to send messages at the exact moment a person needs it.

How to build a sales funnel with automated email sequences and sales pipelines

A funnel doesn’t already exist, ready to be filled. You create the things that ultimately build a funnel. And to do that, follow these steps.

  1. Create a list of all the emails, content pieces, and phone calls you need in your marketing and sales outreach plan
  2. Create these components in your platform to form your sales funnel – and automate everything you can

Your list of funnel necessities can include:

  • Email templates as well as automation recipes – The ability to plug in your own content to a ready-made automation or email means a little less work for you. ActiveCampaign has both!
  • Promotional and sales email ideas – What is going to be most useful to mention in your emails? What are the biggest problems a potential customer needs solved?
  • The number of phone calls and emails you want to make during your process – And the purpose of each
  • A product demo – Nothing is more convincing than seeing that your product is worth it with their own eyes
  • A welcome series – For when those sweet, sweet conversions happen (you can steal this one)

These are all things that can be easily organized when you use an automated email marketing platform and a CRM to build sales pipelines.

Time to create the necessary components in your platform. When you create an email sequences and pipelines in ActiveCampaign, you can attach tags and create triggers that automatically send follow-up emails, or an email that reminds you to make a phone call.

You can also automatically send leads into different pipelines – like a demo pipeline – further down the sales funnel.

Here’s what a sales pipeline can look like:

9s95wj4zb 28fa56e79a291dfbaebf6b005230e060 image2019 04 29at11.49.31am2An ActiveCampaign sales pipeline to do first, second, and third touches with a prospect.

This is what happens at the top of the funnel:

  • You send the first email
  • You send the second follow-up email
  • You schedule the first call

vljn8x1k6 ac demo pipelineAn example of a sales pipeline to schedule and follow-up on a demo.

This is what happens in the middle of the funnel:

  • You book a demo
  • You schedule a second follow-up call
  • You convert the lead into a paying customer

Automated email sequences can be used multiple ways. You can set one up to do things like:

  • Send helpful content that can help solve a problem
  • Send follow-up emails at the right intervals so they know you can answer the questions that come up while they learn about you
  • Start a welcome series to make them feel confident and get started with your product

ehs570jsk 2eae0bdd599fdf10e69b1a829f1bb481 image2019 05 14at3.30.44pm1An example of an automated email sequence – this one sends a helpful case study. A piece of relatable content can give an incentive to stay in the process.

Based on the actions you see in an automated email sequence, you can move prospects into different automations that will take them further through the sales funnel.

Automation makes it so much easier to keep track of follow-up communication in the sales funnel. That way, you know what automations make the most sense for them.

“I focus on two things in a marketing campaign. The first is finding people, and the second is follow-up. And the big challenge you solve is automating follow-up.” – An ActiveCampaign customer.

Why is a sales funnel important?

A sales funnel is important because it helps you:

  • Create a focused marketing and sales plan
  • Find the best ways to relate to your customers during their journey
  • Generate more sales and business growth

Some people will just never buy from you, and that’s a fact. But you have a much better chance to convert qualified leads into customers with sales funnel organization.

96% of visitors to your website aren’t ready to buy anything right away.

That doesn’t mean that visitors won’t ever buy—it just means that they’re not going to do it on their first visit. That’s why you need a well-planned sales funnel process to keep track of their progress and communication. The funnel will help to successfully nurture them into being ready.

Surprisingly, however, not every company has thought to create a sales funnel.

According to Salesforce, a full 68% of companies have not identified or attempted to measure a sales funnel. The same survey showed that an astonishing 79% of marketing leads are never converted into sales. Klick um zu Tweeten

That’s losing 79% of opportunities for new revenue. Most companies are missing 4 out of every 5 opportunities!

So if a sales funnel can help decrease that 79%, why aren’t more businesses jumping to create their own?

Because there are a few challenges in creating a sales funnel…

  • A software platform you don’t know how to use can be intimidating – and feel like even more work to learn
  • You don’t know what features to look for that will help fill your sales gaps
  • You just don’t feel like you have the time when you have a million daily tasks
  • New software sounds like it will cost you an arm and a leg, and you’ve been doing the work yourself this long. Is it worth it?

Yikes. That’s a lot to be apprehensive about. But here’s a secret:

The cost of not getting your leads properly organized is greater than not trying at all.

Without a functioning sales funnel, it’s extremely difficult to convert leads into sales. And without sales, what happens to your business?

Here’s what you need to do.

Identify the problems in your current sales process. Once you know what needs to be improved, the search for software to create automated sequences and sales pipelines is more focused.

Then, it’s research time.

A platform like ActiveCampaign gives you the tools you need for sales funnel success.

Imagine having tools help you handle the necessary communication that converts people into customers.

The three tools you need to build a killer sales funnel are:

  1. Email marketing
  2. Automation
  3. A sales CRM (or customer relationship management)

ActiveCampaign has all three.

df2c589kh ea490b8e5d97b670fda893cee97c0b9d image2019 07 23at3.13.12pm“ActiveCampaign is perfect for the small business that is at the point of critical mass, where they can’t keep up with their clients and potential clients using traditional methods and they need a system with the brainpower and versatility to meet you and your business where you are at.” – An ActiveCampaign customer.

Automated email sequences and sales pipelines takes the stress out of communication – which gives you more time to focus on other areas of your business.

Are sales funnels effective?

Sales funnels are effective, but a funnel doesn’t just exist and work on its own. You need to have the right tools at your disposal within the funnel. Then, with the right tools, it’s a definitive yes.

Matt Ackerson is the founder of AutoGrow (formerly known as Petovera), a done-for-you funnel service. Ackerson also created a course called the 6 Figure Sales Funnel Training.

lt636cn3y image2019 07 18at9.38.22amMatt Ackerson, founder of AutoGrow.

Ackerson claims that a complete funnel has three stages, or the ‘three F’s’:

Foundation – things like landing pages, content, or pop-ups
Follow-up – features like email automation and retargeting
Fuel – which is traffic flowing into the top of the funnel

Ackerman’s go-to recommended tool for email automation follow-up within the funnel is ActiveCampaign. Why? Because of one business’s success with it – ApproveMe.

Companies like ApproveMe use ActiveCampaign to…

  • Tag contacts
  • Set up automated follow-up sequences
  • Score leads as they move through the funnel
  • Segment subscribers with tags to create a personalized experience for each person

“The most powerful feature, in my view, is that it allows you to easily segment your subscribers and create a highly personalized experience for them.

For example, if someone visits a page, you can put them down Path A, or if they get tagged with “interested in Service X” you can put them down the follow-up path related to that interest. You can also personalize individual email content so that it sounds like you are speaking directly to each person.” – Matt Ackerman

There is no perfect sales funnel template that’s ready-made for your business. A sales funnel is a model that your can tweak for your business. And the personalization tools within ActiveCampaign can really help make your funnel your own.

Conclusion: How to fix your sales funnel

You created a sales funnel (or revamped the one you had) and it’s still not producing the results you want. What should you do now?

Time for a little detective work. You have to find out what might be causing your funnel to fail. To do that, start by asking yourself these three questions.

  1. Where are your leads getting stuck? Is there a common stage where leads start to grow cold? Look at past prospecting efforts to see what might need adjusting in AIDA.
  2. What information are leads possibly missing at each stage? Content can go stale. If you’re sending outdated content, your leads aren’t getting the information they need from you
  3. How can you make the process smoother for them? Each stage of AIDA can have multiple steps in it – from what emails you send to what phone calls you make. What can you automate or eliminate to create less work?

Not sure what automation, email marketing, and CRM software is right for you? Start with a free trial of ActiveCampaign – we have all three.

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