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How to build your sales funnel

What are the 5 stages of sales funnels & how can you optimize the customer journey? Access useful insights & tips that will help you to close more deals.

Rose McMillan · October 19, 2023
How to build your sales funnel

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Your sales funnel is one of the most important parts of your organization. It’s a way of tracking your customer’s journey and monitoring steps they take before making a purchase.

For many businesses, the primary goal is to move customers along the funnel to eventually convert them into loyal customers.To do this, you need to optimize your funnel and make the most of it.

In this article, we'll explore how to build your sales funnel, some good examples of sales funnels, and best practices that you should follow to help you optimize your approach.

What is a sales funnel?

You should think of your sales funnel as the embodiment of the customer journey. The top of the funnel represents the point at which an individual or business gains awareness of you and your products or services. The middle represents the point at which they carry out exploration and research, and the end represents the decision to purchase.

As an article published by HubSpot outlines, your sales funnel details each stage of the customer journey. From the point of first contact to a deal being closed.

It's described as a funnel because, at the top of the journey, you have a large number of leads. However as they advance through the customer journey, this number gradually decreases, leaving only those who are serious about buying what you're selling.

The sales funnel covers both sales and marketing activities. At the top of the funnel, activities are generally about attracting attention and making potential customers aware of your business.

Lower down the funnel, activities are focused on educating prospects on business specifics and overcoming common objectives. The final stages of the funnel are about completing a sale, assisting with implementation, and then providing the right level of support to generate loyalty and referrals.

What are the 5 stages of sales funnels?

A typical sales funnel can be broken down into several key stages. Different organizations divide these stages slightly differently, usually depending on the specifics of their industry.

Most commonly used is the 5 stage process, however some organizations choose to split the model into 4 or 6 stages. Let’s explore each of these steps in more detail and discuss how they build a funnel.

1. Awareness

At the very top of the sales funnel is the awareness stage. Here is where a potential customer first becomes aware of your brand and the products or services you sell.

In many cases, this occurs when a customer lands on your website, either from a Google search, following a link from social media, or by clicking on an advertisement.

It's important to understand that around 96% of visitors who reach your landing pages aren't yet ready to make a purchase. But it can be a great opportunity to make initial contact and gain contact information. This then allows you to communicate with these potential buyers further down the sales funnel.It doesn’t matter how a prospect becomes aware of your brand, what matters is how you direct them down the sales funnel. You need to make it easy for them to find information that will drive them towards a sale.

To do this, make sure your landing pages are clear about what you offer and how it can help them. Talk to leads that have been referred to you and outline specifics about what your service or product can actually do for them.

2. Interest & evaluation

The next stage of the sales funnel is interest and evaluation. This is when the prospect begins to develop an interest in your products or services. During this phase, you want to provide leads with valuable information that explains how they can benefit from your products or services.

This stage is where your content marketing strategy can really start to pay dividends. Make sure you have plenty of content that's useful to your leads and educates them about how they can tangibly benefit from what you're selling.

This stage of the sales funnel typically lasts longer than it used to. Customers now have access to large amounts of information making them more self-reliant than they previously were. Research from FocusVision shows that, on average, B2B buyers now consume 13 pieces of content before they decide on a vendor, so you need to be ready.

3. Desire & decision

The desire and decision stage of the sales funnel is essentially the make-or-break phase of the customer journey. It's the point at which a lead expresses actual desire and eventually makes the decision on whether or not to proceed. Now is the time to really drive home what you have to offer and to make an enticing pitch.

During this stage, you need to become much more overt in your sales activities. The lead has now shown a clear interest in what you're selling, so you need to take this opportunity to turn them into a paying customer.

Often, the lead may still require some convincing, even at this later stage of the sales funnel. Last-second nerves and sales objections are common and you may even need to offer a small incentive to get a deal over the line. Salespeople need to communicate confidently, reassure leads who are experiencing doubts, and do whatever it takes to complete the job.

4. Purchase

Once the lead has committed to making a purchase, you need to guide them through the process. This could involve giving product demonstrations, offering consultations, guiding users through the implementation phase, and arranging other forms of support. You can also provide relevant onboarding content.

You'll also need to agree on a price and a payment structure and finalize some of the smaller details. If you're offering a subscription, you should try to tie them down for as long as possible based on their needs and budget.

Make sure the checkout process is as smooth as possible, as you want to avoid any unnecessary friction. Any problems could cause a prospect to back out at the last minute or look for alternative solutions.

5. Retention

The final phase of the sales funnel is retention. This is how you ensure that your newly closed deal becomes a loyal customer account. You want them to continue to use your products or services and be open to doing more business in the future. This stage is sometimes bundled in with the purchase phase, but it requires different skills and techniques so it’s best to treat it as a unique phase of the sales funnel.

Businesses offering software as a service (SaaS) or subscription-type products and services need to be especially concerned with retention and customer success. A successful customer is happy and satisfied, making them more likely to continue subscribing. They're also more likely to recommend you to their friends, family, colleagues and business partners.

Many modern businesses have a separate customer success department purposely set up to keep customers happy. They can help keep communication channels open and help customers get the most out of what they've bought.

4 common types of sales funnels

Now we’ve covered each stage of the sales funnel, it’s time to look at some common types. The type of funnel you use depends on a few factors including:

  • Your industry
  • Your product
  • Market realities
  • Target audience

Let’s explore the most common types of sales funnels and why they may or may not work for your organization.

Lead magnet sales funnel

A lead magnet sales funnel works to capture leads so that businesses can generate a list of targets to pursue. It usually involves offering a whitepaper, ebook or other free item that's of interest to your target audience. To gain access to this asset, users must enter their contact information.

It's an especially great strategy for startups, as well as businesses with longer sales cycles. Lead magnet sales funnels can produce a large amount of leads relatively quickly, but you should consider that the quality of the leads can vary.

Tripwire sales funnel

The tripwire sales funnel is similar to a lead magnet funnel but works by offering a low-priced product that holds real value for your target market. This offer encourages sales leads to make a small initial commitment.

An example would be a discounted trial period. While this is not especially cost-effective for a business in the early stages, it's great for capturing high-quality leads and can build loyalty. From there, sales teams can target these leads and pursue larger, more valuable deals.

Product launch sales funnel

As the name indicates, a product launch sales funnel is geared towards the launch of a new product. The focus is on creating content that hypes up the product, highlighting its key features and use cases to create a buzz. This can then generate a list of interested contacts.

Once the product is released, sales teams use this list of contacts to pursue deals. This funnel type generates a lot of excitement as it makes prospect worry about missing out, but it is a short-term sales strategy.

High-ticket sales funnel

A high-ticket sales funnel is used exclusively by businesses selling very high-priced products or services. This type of sales funnel relies on a personalized approach and a long sales cycle.

It will usually involve communication across multiple channels, including online, over the phone and in person. It requires sales and marketing to tailor their method to each individual, similar to account based selling. It's an approach that is commonly used in fields like real estate.

Key steps to building your sales funnel

Whatever your approach, there are a number of key steps that can help you build your sales funnel. Let’s take a deeper look at what these stages are and how they can optimize your funnel to achieve success.

Understand your target market

The first step to building your sales funnel is to not only identify but also understand your target market. You should consider whether your target market is based locally or globally. As well as what specific problems they face.

This can help you assess the purpose of your offering, and how it can assist them. Then, you can break this target market down into smaller segmented target audiences, which can be pursued with different sales and marketing strategies based on their needs and preferences.

Generate interest from potential customers

Next, you need to use every available opportunity to generate interest from your target audience. There are a range of marketing tactics to use including:

  • Pay-per-click (PPC)
  • Social media posts
  • Organic search via search engine optimization (SEO)
  • Email marketing
  • Content marketing

You should also make sure your website is mobile optimized. That way you can direct potential customers straight to your landing pages and obtain contact information quickly and easily.

Optimize your CTAs across all content

A call to action (CTA) is a way of encouraging users to carry out the actions you want. This could be: clicking through to your landing page signing up for a mailing list registering for a service trial. Your CTAs need to be optimized across all your content. Personalized CTAs tailored to individuals perform have been shown to convert 42% better than generic CTAs. Try adding dynamic CTA buttons that reference the user's location, suspected intent, device, or referral source.

Create great landing pages & forms

Your landing pages need to grab attention, provide the most important information, make clear who your product or service is useful for. It also needs to include some sort of evidence or social proof, such as results or reviews.

A good technique for optimizing your landing pages is A/B testing, where you create two landing pages and measure their performance results. You then proceed with using the page that produced the best results during the testing period.

Score leads & follow up logically

You may have plenty of leads at the top of your sales funnel, but these leads are not all equal. Some are going to be much more likely to convert to paying customers than others, so you need to qualify your leads through a lead-scoring process.

Lead qualification forms a key part of modern sales enablement. Once you score leads, you can follow up logically, prioritizing quality leads and avoiding spending too long on less likely opportunities.

Create content to educate & persuade

Your business should be constantly creating and updating marketing and sales-based content. This content needs to educate and persuade as well as establish your business and your employees as experts in the field.

Focus on making useful and engaging content. A report from the Content Marketing Institute shows that the top types of content are short articles (83%), videos (61%) and infographics (51%). The use of long-form articles has also grown substantially in recent years.

Make use of high-quality software

To effectively manage the sales funnel you've built, you're going to need to make good use of software. In particular, you'll need customer relationship management (CRM) software, as well as sales pipeline and sales analytics tools.

You can also use artificial intelligence (AI) tools to assist with content generation ideas. However, as Marketing Insider Group highlights, AI can't currently replicate human content creation when it comes to brand storytelling, humor, original ideas or empathy. For this reason, it's best not to be overly reliant on AI for actual content creation itself.

Final thoughts

When building a successful sales funnel you need to have an understanding of your target market. This way you can better understand what you're able to offer them and why they need your service.

It also requires the creation of high-quality content to spark initial interest and guide leads down the sales funnel, bringing them toward the stage where a deal can be finalized.

While there are different types of sales funnels to explore, they all require managing and careful monitoring.Finding the right tools and software packages to assist you can also go a long way.

Capsule is a CRM solution that includes contact management, sales pipeline, email marketing and sales analytics elements. Find out more about Capsule's role in sales funnel building and sign up for your 14-day free trial.

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