Sales Funnel Stages Explained: Our Quick Guide on How to Build Powerful Funnels

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One of the best tools in your digital marketing kit is an effective sales funnel that guides your prospects toward conversion.

95% of buyers choose to buy from businesses that provide them with an informative sales funnel to guide their purchase process.

We’re going to take an in-depth look at what a sales funnel is, the different stages within a sales funnel, and everything you’ll need to develop your own sales funnel.

1. What is a sales funnel?

A sales funnel or sales pipeline is the guided journey that your visitors take to become paying customers.

Sales funnels allow you to educate your potential customers about your product at each stage of the process, helping them make an informed purchase.

Understanding exactly what happens at each level of your funnel is essential because it tells you:

Where and why leads are dropping off before converting
What worked well and made previous customers convert
How to improve your prospecting and optimize your funnel

To really grasp what’s going on in your funnel and how to improve it, let’s break down the 3 different levels of the sales funnel process.

1.1. The top of the funnel (TOFU)

The top of the funnel (TOFU) is called the awareness or discovery stage, and this is where you make first contact with your audience.

They’re experiencing a problem and searching the web to learn more about it and how to identify it.

This is where they’ll first learn about your business, and because attention spans have shrunk to just 8 seconds, you need to make a powerful first impression.

Your goal at the top of the funnel is to turn as many site viewers into leads as possible.

Staying in contact with those leads is how you’ll continue to guide them towards an eventual purchase.

1.2. The middle of the funnel (MOFU)

By the middle of the funnel (MOFU), there will be fewer people on this sales journey.

Those that remain are leads who fit your ideal customer persona and are actively looking for solutions to their problem.

This is where you can qualify your leads whilst establishing your authority in their problem’s niche.

Your goal in the middle of the funnel is to get your leads interested in your business and emphasize their desire to find a solution.

Creating content that answers their questions and empowers them with the ability to articulate their problem is where your focus should now be.

1.3. The bottom of the funnel (BOFU)

As the bottom of the funnel (BOFU) is reached, even fewer people will remain in your sales funnel.

Here, you present your product as the best solution for your qualified lead’s problem and explain why they should choose to do business with you over anyone else.

You’ll need to present your leads with your sales proposal and allow them to go through a process of negotiation and comparison with other possible solutions.

A successful sales funnel will win your lead’s business and convert them into loyal customers.

2. The 4 sales funnel stages

Now that you have a better idea of the journey people take within a sales funnel, what can you do to get them there?

The 4 sales funnel stages are easily remembered with the acronym AIDA:

Awareness
Interest
Decision (sometimes called Desire)
Action

Let’s examine each stage of the funnel and look at what content you can utilize to enhance them.

The different stages will show you how to approach your potential customers.

2.1. Stage 1: Awareness

The first stage of a sales funnel is called the awareness stage and forms the beginning of your marketing and sales pipeline.

You’re giving your business the exposure it needs and getting people to discover it.

It isn’t a sales pitch, it’s about creating awareness around your product or service in ways that are valuable to your audience.

The most common way to reach your target audience is through social media.

It’s essential to have a social media presence because consumers tend to trust brands more when they have a following and good engagement.

There are several ways you can use social media to attract visitors:

Social Media Ad(s) — Create an ad on Facebook or Instagram that will take visitors to your site. You’ll need to entice them to click on the link, without selling your product
Videos — Create informative videos about your product, and post them on YouTube and Facebook to reach prospects
Infographics — Convey interesting stats. People tend to consume information in graphics easier than in long texts
Blogs — Write informative content about relevant topics, use the right keywords for SEO, and you’ll get more traffic

The content you should be producing and publishing here can take the form of:

Guest posts
Quizzes
How-to videos

Make sure you produce relevant content, so when prospects search for an answer to their question, yours will show up.

Pay attention to the questions people are asking on Facebook groups and Reddit regarding your niche, and write articles that answer those questions.

2.2. Stage 2: Interest

Your goal in this sales funnel stage is to form a relationship with your prospects and aim to help them solve their problems.

This is also called the lead generation stage because one of your biggest aims is to gather the details of interested viewers.

Here are some places to focus on when you’re crafting the interest stage of your customer journey:

Blog post(s) — Can also be used in the interest stage for keeping visitors engaged as well as creating authority in your niche
Landing pages — Display information that’ll grab your visitors’ attention
Links — Include links to your landing page and other articles so readers are prompted to look around whilst remaining on your site
Forms — Collect visitors’ contact information using pop-up or exit intent forms to gather leads

Usually, people won’t give you their contact information without getting something in return.

To convert site visitors and generate leads, you’ll need to present a lead magnet.

Offer them a free, yet valuable, item in exchange for their email address:

eBooks
Webinars
Coaching sessions
Guides and cheat sheets
Online courses

2.3. Stage 3: Decision

At this stage, leads have done their research, taken an interest in your brand, and are now considering making a purchase.

This is the stage where prospects drop off significantly, which is something you want to minimize if possible.

Since they’re still deciding, this is the time to reach out to them and show that your brand is the right one for them.

You can do this by using:

Email campaigns — Explain your brand and answer any possible concerns in these emails, so prospects feel confident they understand and can trust your product
Product comparisons — Let prospects know why your offer is the best one
Testimonials from satisfied customers — Show potential customers that your product works and that your brand is a suitable fit for them
More webinars and videos — Put out additional information that could push prospects to a decision
Sales pages — Present your offer with written copy that convinces your leads that yours is the best solution
Extra offers — Offer discounts, coupons, or a free product to give them your best offer, and make it a deal they can’t refuse
A free demo — Provide the option of arranging a call to demonstrate your product or service and solidify their decision

You’re going through the process of qualifying your leads based on their interests and behavior.

Find out if your business is a good fit for their needs, and show them that your product is right for them.

2.4. Stage 4: Action (Purchase)

The final stage of the sales funnel is centered around turning qualified leads into customers.

You’ve got to nurture the relationship with your customers.

Give them time to adapt, but let them know you’re there to guide them.

You also want to keep your existing customers happy, and here are some suggestions on how to do that:

Surveys — Give customers a chance to share their thoughts on your product, which shows you what needs improvement
Email campaigns — A follow-up email campaign will show customers that you haven’t forgotten about them and that you care about more than just a sale
Loyalty programs — Provide rewards using a point system or discounted offers
Training sessions — Teach new customers how to navigate their way around your product or how to implement it

Now that you know the “how-tos” of your sales funnel, let’s get into “why” they’re a key element in your sales process.

3. Why use a sales funnel?

A sales funnel acts as a kind of pathway that guides people through the buying process.

This pathway also guides you and your sales team by making it easy to unify your sales and marketing efforts.

Once you marry your marketing activities to your company’s sales model, the benefits to you and your customers are impressive.

3.1. The benefits of using a successful sales funnel

Because your sales funnel illustrates how you turn viewers into leads and leads into customers, the sales process is simplified for everyone involved.

Here are the people who benefit from a well-defined sales funnel:

Potential customers
The business owner
Sales reps and entire sales teams
Marketing teams

These people and groups of representatives get a load of value out of this one aspect of your online business.

3.1.1. Send the perfect message at the perfect moment

When you set up your sales funnel, you should include a detailed list of questions and information your prospects will need at the different stages.

With that sales funnel script on hand, your salesperson knows exactly what your prospect needs, no matter which stages the prospect’s in when they reach out.

Your potential customer will never feel trapped in sales conversations that they're not ready for.

You can (and should) link your sales funnel to an email campaign as well.

Even when you’re not physically there, you can set it up to stay in contact with your audience and nurture your leads.

3.1.2. Convert prospects quickly and effectively

When you’ve had your sales funnel working for some time, you’ll be able to start streamlining your sales process.

The longer your sales funnel has been running, the more you and your sales team will be familiar with what it takes to keep your leads moving to the next stage.

Being able to answer queries and objections as soon as they come up will make your conversions swift and smooth.

Your customer engagement will be positive and create trusting relationships between you and your growing audience.

3.1.3. Create loyal paying customers

One way to convince your potential customer that your product is right for them is to get them into your sales funnel ASAP.

The longer your prospects are out there researching other ways to solve their problem, the less chance you have of converting them.

By introducing prospects to your sales funnel sooner, you’ll prevent them from looking elsewhere for their solution.

You’ll also show them that you’re trustworthy and an authoritative source of information regarding the issues they face — you may find they become repeat customers.

3.1.4. Save yourself a ton of time

Having loads of leads in your funnel isn’t necessarily a good thing.

You or your sales reps might have your hands full with all those people who may not actually want or need what you have to offer.

Instead of that overflowing sales pipeline, you want more qualified leads who are on their way to the purchase phase.

A great sales funnel with a savvy marketing team helps you retarget leads based on their online behavior and then either keep them moving through the funnel or let them go if they’re not interested.

This way, you’ll only spend time and resources on qualified prospects and dismiss bad leads early.

3.1.5. Track the right metrics

To improve your sales process, you need to track your marketing and sales efforts.

When those elements are separate, it can be tricky to pin down how successful they are — that’s where your sales funnel comes in.

Sales pipeline builders often come with built-in management software that allows you to track your conversions and sales at every level.

Here are some performance markers to look at when you’re measuring your sales funnels’ success:

Pageviews — How many eyes are on your pages and in the awareness phase of your funnel?
Opt-in conversion rate — How many of those eyes show interest and become leads?
Sales conversion rate — How many of your leads follow your sales process and become customers?
The average size of sale — Do more customers stick to your standard package or are they happy to bump up their order with an upsell?
Where do these conversions originate — Which pages have the highest conversion rates, and which need work?

Once you have these values in front of you, it's easy to gauge where your sales and marketing teams are working well together.

It also clarifies what needs to be changed or rebuilt to optimize your conversions.

4. Working sales funnel examples

To really see how a sales funnel works, you need to get inside of one.

That’s why we’ve chosen a couple of examples of successful sales funnels for you to have a look at.

You’ll see how these sales teams guide prospects through the different sales pipeline stages.

Time to get some sales funnel inspiration!

4.1. Example 1 - Gaia

Source: Gaia.com

Gaia is an online streaming platform where users can enjoy yoga classes on-demand, as well as meditation and other esoteric workshops.

Although its exact net worth is unknown, it’s one of the most successful alternative streaming companies with 202,000 members across 140 different countries.

The sales funnels built by Gaia’s sales team are efficient and well designed:

Awareness stage — Recognizable branding and YouTube ads that focus more on their particular niche

Gaia lead magnet and sign-up form

Interest stage — Free content via email, the ability to watch across multiple devices, their own mobile app, and glowing testimonials
Decision stage — Presented with a 7-day unlimited free trial followed by a cheap monthly subscription fee and exclusive content

Gaia pricing plans

Action stage — Instant access to their wide range of yoga classes, guided meditation, documentaries, human interest stories, etc.

Because Gaia’s niche is pretty narrow, they ensure their success by making their platform available and compliant globally.

The sales process itself is a little longer than it should be (sign-up is a 3-5 step process), but they do give away a ton of value for free.

Their sales funnel is also fully integrated with their email marketing, so their leads never feel like they’re left out of the loop.

This is a tactic that all sales funnel builders should implement!

4.2. Example 2 - Netflix

Source: Netflix.com

Netflix is a popular online video streaming service that eliminates commercials.

By paying a monthly subscription fee, users can stream or download films and tv series to a Smart TV or device.

The company is currently worth just over $289 billion and has 213 million global subscribers and counting.

Part of their success is down to their easy-to-navigate website and sales funnel stages:

Netflix adverts on Facebook

Awareness stage — Strong branding and few social media ads that focus more on retargeting interested viewers
Interest stage — Exclusive content and the ability to watch across multiple devices across the globe

Netflix payment plans

Decision stage — Presented with a cheap monthly subscription fee and the option to cancel at any time
Action stage — Instant access to their wide range of films and tv shows, as well as dedicated support

While they used to offer a 30-day free trial, they no longer need to because their brand is now a household name.

Netflix also emphasizes their security, so their audience trusts them more readily with their data.

Their sales funnel management software keeps their pages running, even when the service itself is experiencing some downtime.

There are definitely some strategies here that you can use in your own sales funnel.

We suggest you keep your UX as simple as possible, safeguard your leads’ data, and promise a powerful guarantee when you make your offer.

5. Defining your sales funnel

A well-defined sales funnel helps you improve your entire sales process.

You need to conduct competitive research to see how other businesses have built out their sales funnels in your niche to achieve this.

You can do this with a Google search or dig into more in-depth resources like the Internet Archive to follow how other websites have changed.

By combining the best elements of your competitors’ sales pipelines, you’ll give yourself an edge over them as soon as you enter the market.

5.1. Research and creation

When you get started with building your own sales funnel, there’s a standard process you should follow:

1. Map a future customer’s purchase process — At which points are they faced with sales decisions? Where do those points align with your own company’s sales cycle?

2. Get a second opinion — Ask a sales rep, marketing team, or colleague to take a look at your plan and point out any weak spots

3. Review the process — Especially if you work with several sales reps who need to understand the goals in your own sales funnel stages and how you’ll measure success

4. Revisit your sales pipeline — After a couple of months, you should rework, remove, or redo any elements so that your sales funnel continues to evolve and improve

Preplanning the journey for your customers means doing a lot of research upfront.

Here are a few of the resources you need to develop to give your sales funnels the best chance at success right from the start:

Buyer personas — Essential to understanding your potential customers and creating a sales funnel that’s tailored to them
Sales scripts — Necessary for keeping sales reps on brand and equipped to answer to the needs of your leads at any stage of the funnel
Lead magnets — Developing one or two of these before starting with your sales funnel will stop you from putting extra pressure on yourself later
Business goals — Laying out what you expect from each funnel, as well as any milestones, keeps you focused and helps you see what needs improvement
Marketing resources — Adverts, blog posts, and other elements need to be built before they can be added to your sales funnel

These resources are also incredibly useful if you’re seeking outside investment in your company.

As a new business, you may not yet have tangible results to show them, but your resources and planning can give them an idea of your predicted sales performance.

5.2. Finding and fixing leaks

While having some prospects drop off of your sales funnel is part of the funneling process, what happens if you lose too many?

There are a few clear indicators that your funnel has sprung a serious leak:

The sales process is taking too long (this is dependent on your business and your niche)
You have lots of leads, but they’ve gone cold and seem uninterested
Your leads don’t engage with your emails, and your spam numbers have increased
Your conversion rate of leads into sales is lower than your industry standard

While these markers might strike fear into your sales and marketing teams, there are things you can do to find and patch up the holes.

When fixing a leaky funnel, the first step is to go through your sales funnel from start to finish.

Remember that plan you set up when defining your sales funnel? Well, now you’re going to revisit it and look at any spots where your user experience (UX) can be simplified.

Step 2 is to find out how long it takes for your sales team to respond to your leads.

1 hour or less is widely accepted as a good lead response time — the quicker you reply, the more likely those leads are to convert.

The next place to look for holes in your sales and marketing approach is with your disqualified leads.

These are leads that drop off of your sales funnel because something in your messaging is missing for them, even though they fit your buyer persona.

Retargeting those leads or developing a separate marketing funnel that’s better for them can help you plug a gap in your current marketing strategy.

An even better way to catch and correct any issues with your sales funnel is to build your funnels with powerful, all-inclusive software.

5.3. Funnel management software

Simply put, it’s the easiest way to create an entire sales funnel, especially if you’re just getting started.

Using sales funnel software is also the best way to keep track of your sales.

You’ll be able to create landing pages, integrate payment gateways, and automate your email marketing, amongst other things.

Managing all these features in one place gives you a complete picture of your sales and marketing journey.

Not all sales funnel builders offer extra features, but systeme.io does.

systeme.io logo

Besides sales funnel management, you can do the following:

Create landing pages — Market your products with or without a sales rep
Run affiliate programs — Reward loyal customers for sending you referrals
Sell products — Simplify the buying process with order forms, order bumps, and 1-click upsells built into your sales funnel
Launch an online course — Take the sales process one step further and monetize your expertise
Automate your entire business — Send emails, tag contacts, and deliver digital products effortlessly

We’ve also thrown in lead management software, so you can host and tag your contacts all on one powerful platform.

The pricing of this software is inexpensive yet inclusive of everything you need.

For $0/month, you’ll have access to:

3 sales funnels
Unlimited emails with up to 2,000 contacts
Marketing automation
1 membership site with unlimited members
Affiliate program management
Unlimited blog posts on your blog
PayPal and Stripe integration
1-click upsells and order bumps

Want to build even more funnels and scale your business?

Just choose from one of our 3 standard payment options: the Startup plan, Webinar plan, or Enterprise plan, and watch your business grow.

systeme.io pricing plans

If you’re after something a little more specific, you can contact our sales team, and they’ll create a custom pricing plan that’s perfect for you.

Commit now to one of our annual payment plans, and receive 30% off plus free migration!

Not convinced? Click here to see how systeme.io faces off against our competitors.

6. Conclusion

Source: Giphy.com

Building the perfect sales funnel isn’t difficult when you’re armed with the right information and tools.

Make sure you know what your future customer expects at every stage of your funnel, and take your time to plot your sales and marketing strategies.

After a Google search on your competition, thorough planning, and the right platform by your side, your sales pipeline can only succeed.

Streamline your sales activities, and build your first funnel for free with systeme.io today!