How to Build a Sales Funnel: Step-by-Step Guide [Updated: 2024]

Worried about how to build a sales funnel? We’ve created a guide to help you with your sales funnel from start to finish.

After reading this beginner’s guide to building sales funnels, you’ll understand how to build funnels that rock at making sales.

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What is a sales funnel?

A sales funnel guides customers through the stages of the sales process, from cold leads to loyal paying customers. Learn how to build trust and drive business growth.

A sales funnel describes the stages customers go through in the sales cycle, from cold leads to paying customers who trust your brand.

You find funnels in all types of businesses, from brick-and-mortar stores to eCommerce shops and affiliate marketing. So, if you have a business, you need a funnel!

Chances are, you already have a sales funnel (you don’t realize it)– If you get traffic and you persuade those leads to buy your product, you have a sales funnel! Congrats 😁

Businesses that use marketing automation to nurture leads get 451% more qualified leads.

Source: Salesforce
The Sales Cycle Stages - Make contact, qualify leads, nurture prospects, make an offer, overcome objections, close, follow up
  • A sales funnel guides prospects through the sales cycle.
  • Funnels exist in online and offline businesses.
  • A good sales funnel optimizes conversions at each sales process stage.

How a Sales Funnel Works

Here’s a saying: ‘There are many ways to skin a cat…’ (yikes 😬).

Many ways to skin a cat gif

The same applies when you build a sales funnel; there are multiple ways to do it. However, there are some proven principles to keep in mind.

Sales Funnel Stages: Four levels of a sales funnel - Top, middle and bottom

ToFu – Top of Funnel

In the awareness stage, potential customers first find your business and learn about your products.

MoFu – Middle of Funnel

At this phase, your target audience recognizes they need some help in the form of a product or service. They are engaged but have yet to choose a specific product.

BoFu – Bottom of Funnel

The decision and purchase stage. Here, potential customers become actual customers by choosing and purchasing your product (or not).


Sales Funnel (AIDA method)

The AIDA model is the secret sauce behind almost every good advertising and marketing campaign. It guides potential customers from discovering your product to making a purchase.

Discover the power of the AIDA model! From product discovery to purchase, learn how to drive successful advertising and marketing campaigns.

Awareness

At the top of the sales funnel stage, your brand first grabs the attention of someone in your target audience. That’s why it’s also called the β€˜attention’ phase.

Interest

People know about your business in the interest stage and want to learn more. Now is the perfect time to understand what problems they want to overcome. One way to engage them is to provide ‘quick wins’– so they get to know and like you.

Desire

In the third phase, potential customers check out different products to find the best fit for their needs. As a business, you must show that your product solves their problems and why it’s the best choice.

Action

In the final sales funnel phase, potential customers will either purchase or not. You will want to show why the prospect must buy your product if they’re going to get to their goal.

FACT

The AIDA model, introduced by Elias St. Elmo Lewis in 1898, revolutionized marketing strategies.

AIDA is an easy-to-understand sales funnel model. Another way to build sales funnels, made famous by Russell Brunson, is a little more advanced but wildly effective.


Sales Funnel (Russell Brunson method)

The various sales funnel stages are kind of similar, but the key is how we engage customers at each step.

Russell Brunson Sales Funnel Approach

Brunson’s method, unlike AIDA, involves smaller conversions along the way to the final purchase.

What is a Value Ladder?

A Value Ladder is all about customers moving through products in a specific order.

Discover how a Value Ladder guides customers through a sequence of products, each delivering increased value.

When you build funnels, think about how you will move customers from one product to the next and up your value ladder.

Value Ladder 101

Traffic

To attract the right audience, you need to find where your potential customers gather and engage with them there.

Bait

A free offer to ‘hook‘ prospects and build trust. It’s also called a ‘lead magnet‘ and can help create an email list.

Front End

Provide a low-cost solution that solves surface-level problems without breaking the bank.

Middle Offer

Offer new and existing customers better solutions to pain points, leading to your next product.

Backend

Your most expensive product.
Don’t be pushy! Keep serving all customers with good content.

Continuity

Generate regular, predictable revenue with subscription plans and loyalty programs.

Show your customers you value them, even after they have already made a purchase.


Funnel Hacking, What is it?

Your competitors may already have successful funnels targeting your ideal audience. So why not see what they are doing and how it can help you craft your sales funnel?

Don’t copy their funnels (that isn’t good). Instead, study their landing page, pricing, and traffic sources, and experience their sales funnel as a paying customer.

Welcome to sales funnel hacking! πŸ™Œ

What is funnel hacking - example diagram

1. Know your competition

Make a list of your competitors, even those who might sell a different product than you sell. Also, find businesses in various niches but with your target audience.

2. Document everything

Dive into their sales funnel and take notes. Include sales messages, traffic, upsells, downsells, pricing, lead magnets, and emails.

This information will help you create a map of their funnel so you know what works and why it works.

Screenshots are the best for comparing sales funnel steps later. I use GoFullPage, a free Google Chrome plugin that captures the entire page, even if it’s long.

3. Find the traffic source

Find your competitors’ traffic sources to attract high-quality leads. These tools will help you figure it out;

  • Description:

    A powerful SEO suite that will reveal your competitors' traffic sources, top referring sites, and even the origin of their traffic (mobile or desktop).

  • Description:

    My favorite SEO tool. It shows competitor traffic, locations, backlinks, and keywords driving the most traffic. Has features that are free to use, even though it's a paid product.

Description:

A powerful SEO suite that will reveal your competitors' traffic sources, top referring sites, and even the origin of their traffic (mobile or desktop).

Description:

My favorite SEO tool. It shows competitor traffic, locations, backlinks, and keywords driving the most traffic. Has features that are free to use, even though it's a paid product.

Description:

Quickly and effortlessly identify the top referring sites that drive traffic to and from your competitors.

Lasso Brag

4. Buy competitor’s products

This part may sting initially, but it’s the best way to peek behind the screen and understand how to structure your funnel steps.

You don’t have to make the final purchase (unless you want to), but document each step in the funnel, including:

  • The bait or attractive offer.
  • The content and sales message.
  • What is the promise they make customers?
  • The pricing strategy.
  • Upsells, downsells, and one-time offers.
  • What emails did they send after the purchase?

Funnel Building: Step-by-Step

Regardless of your strategy (AIDA or Russel Brunson), the tactics for making and fine-tuning a sales funnel are the same.

Offer an Incentive (Lead Magnet)

Companies collect email addresses because people’s information is valuable. You need to offer something worthwhile in return for getting someone’s email.

The better your lead magnet, the more potential customers you’ll attract. So, go big!

PRO TIP

Offer the same thing as a free lead magnet that others in your niche charge for.

Examples of lead magnets:

SEJ webinar lead magnet

What’s a good lead magnet, you ask? This is πŸ‘†It is eye-catching, topical, and has a clear CTA (call to action). Source: SEJ

Wordstream lead magnet
Source: Wordstream

Even if your lead magnet is ‘free‘, it must have real VALUE so that someone will give you their email address for it.

Send Leads to the Landing Page

Once they’ve got your lead magnet, direct your new potential customer to a landing page featuring your first paid offer.

If you’ve done a good job targeting the right audience with the right lead magnet, and your new offer is a logical next step in solving their problems, some new leads will purchase.

Others won’t, and that’s fine! Regardless, what you do next is crucial for the success of your sales funnel going forward.

Examples of landing pages:

Develop a Relationship (Nurture)

Getting someone to trust you enough to part with their hard-earned cash isn’t easy. Don’t be stressed if it doesn’t happen immediately – building trust requires patience.

It takes about 6 to 8 touchpoints to generate a solid sales lead. 🀝

Source: Salesforce

At this stage, you are focusing on building a strong bond. Your aim? To make them loyal patrons who return to you time and again.

Connect with your audience where they spend their time. You could use email, social media, or paid ads to get your content in front of your target audience.

Whatever the method, offer incentives like extended trials or discounts.

FUN FACT

Lead nurturing strategies that work well generate 50% more sales-ready leads at a 33% lower cost.

Source: Invespcro.

Fine-tune Your Sales Funnel (Funnel analysis)

So, you’ve created a sales funnel, but it’s not delivering the desired results? Don’t worry, we’ve all been there. Often, the issue boils down to one crucial factor – understanding the numbers that drive your sales funnel.

Here’s the good news: sales funnel analysis tools! They help you navigate the numbers and metrics behind your sales funnel.

Ready to take your sales funnel from good to great? Here are some of these tools that can help you make that happen.

  • Plerdy is a conversion rate optimization software with a helpful conversion funnel analysis tool. It helps you understand your customer journey better. Pretty cool, huh?
  • Geru is a fantastic funnel mapping software that simulates funnel ROI without spending anything. You can accurately predict your sales funnel’s earnings before going live!
  • Google Analytics helps you map the conversion and sales process, from lead-generation ads to post-sales follow-up. How awesome is that?

Tracking Success: Key Metrics for Your Sales Funnel

Not everyone loves math (I do πŸ₯Έ), and that’s okay. But if you’re an entrepreneur with a sales funnel, there are a few numbers you better know about.

These sales funnel metrics will help you identify issues and strengths and build funnels that ultimately give you a better return on investment (ROI).

  • Average order value: tells you how much each sale brings in, on average. To calculate it, divide your total revenue by the number of orders received during that over the same time.
Average Order Value - Sales Funnel Metrics you should know
  • Conversion rate: It’s the percentage of leads that become customers. Understanding your conversion rate helps you optimize lead conversion and track progress over time, boosting your revenue.
Conversion Rate - Sales Funnel Metrics You Should Know

Only 22% of businesses are satisfied with their conversion rates.

Source: D John Carlson
  • Entrances: the number of leads that enter the funnel during a specific period.
How many people enter your sales funnel - Entrances - Sales Funnel Metrics
  • Follow-ups: the number of potential customers that take some sort of action after you reach out to them (via email, SMS, etc).
  • Flow rate: the average time leads are in each funnel stage.
  • Total sales: Total money you make from all sales within a specific period. It’s important so you know when things are going well and when they aren’t.
How much money are you making from the sales that you convert in a specific period of time - Total Sales - Sales Funnel Metrics

3 High-Conversion Sales Funnel Examples

Squeeze Page Sales Funnel

If you need a truckload of leads for your business (who doesn’t? πŸ€·β€β™‚οΈ), then a squeeze page funnel will be your best friend.

Discover the secret to generating leads for your business with a squeeze page funnel. Level up your lead generation game and turbocharge your success.

The squeeze page is at the top of the funnel (ToFu), and you are hoping to make your audience aware of your brand and spark their curiosity.

How? Drive traffic to the Squeeze or Optin Page and ask for their email address. But why would they share their email? Because you are going to make them an offer too good to resist.

In exchange for their email, give them a free ebook, a handy checklist, or an informative course.

The more valuable your gift is, the more people will sign up.

After that, they land on your “Thank You” page.

PRO TIP

Try out various lead magnets on your squeeze page to determine which has the highest conversion rate.

Tripwire Sales Funnel

The tripwire sales funnel rocks at making sales! But, it also doubles up to collect leads because customers give you their email, address, etc. before they can make a purchase.

The tripwire sales funnel is highly effective in driving sales! Moreover, it serves as a lead generation tool as customers provide their contact information, such as email and address, before completing a purchase.

The landing page (2 Step Sales Page) has a video or sales letter on the left and a shipping form on the right.

Video or sales copy?

Choose what you are most comfortable with. You can also A/B split test two versions of the trip wire funnel – one with video and one without.

Once users enter their info, they get directed to a One Time Offer (OTO) page, where the tripwire funnel works its magic.

On this OTO page, offer them a limited-time upsell offer. It allows buyers to add it to their order before they complete payment.

Lastly, they’re taken to the order confirmation page, which has an Offer Wall with other products at a special price.

This sales funnel helps maximize cart value and gives buyers a chance to get more of your product line at a special one-off price.

Video Sales Letter Funnel

We live in the age of video, and this includes video marketing. Check out these video stats;

  • Video content consumption is rising: 244.4 million video viewers in the US.
  • People love videos on Social Media. 66% prefer short-form videos.
  • Video marketers convert 66% more leads than non-video marketers.
  • Video is a moneymaker; 92% of video marketers say it has good ROI.
  • Around 72% prefer video for product learning over reading.

This sales funnel is similar to the tripwire sales funnel. Instead of a sales letter, you present your product’s sales message through a video.

Video Sales Letter Funnel Infographic

It starts with the sales letter page, but the video delivers the message. The next page is the OTO (One Time Offer) page; the final step is the order confirmation page.


Why are Sales Funnels Important?

A sales funnel is like having the best sales reps who nurture prospects year-round, driving your sales and marketing efforts. A solid sales funnel is important to any successful inbound marketing strategy.

Here’s why funnels matter:

  • Provide a structured approach for converting leads into customers.
  • They allow you to identify weaknesses in your sales process.
  • Provides a roadmap for retargeting customers and increasing sales.
  • Shows you what matters to your customers.
  • It helps to find opportunities to serve your customers with new products.
  • Increase transaction value (average cart value), meaning more revenue.

Businesses with a structured marketing funnel are 33% more likely to close sales.

Source: Hubspot

How to Build a Sales Funnel: Summary

  • Step 1: Identify Your Audience – Get to know your target customers – their needs, behavior, and pain points. This way, you can customize your sales message to meet their requirements.
  • Step 2: Create a Value Ladder – Create a lineup of better and more valuable products as customers interact more with your business.
  • Step 3: Map Out the Buyer’s Journey – Identify all the stages a customer goes through before purchasing.
  • Step 4: Generate Traffic – Use various traffic channels, such as blogging, social media, and paid advertising, to attract visitors to your sales funnel.
  • Step 5: Use a Lead Magnet – Give away something valuable for free in exchange for email addresses. It could be an ebook, a discount, a webinar, etc.
  • Step 6: Implement an Email Drip Campaign – Nurture leads by providing them with valuable content over time, gradually leading them towards making a purchase.
  • Step 7: Measure and Optimize – Keep an eye on funnel metrics and fine-tune your sales funnel using data. Tools like Plerdy, Geru, or Google Analytics can lend a hand with this.

Wrap-Up

Sales funnels are amazing 🎸 Every business that wants a steady stream of leads that are ready to buy should learn how to build them.

Funnels are a rock-solid way to build an email list and turn it into paying customers, and a working sales funnel will help improve customer retention.

I highly recommend sales funnel-building tools like ClickFunnels, GetResponse, or Groove for all your marketing and sales efforts.

Creating a sales funnel requires careful planning and a dash of patience. Just follow these steps to design a sales funnel that is effective and that will help you maximize your revenue. Good luck! 😊

Sales funnel FAQs

The four stages of a sales funnel represent the customer’s journey towards purchasing. These stages are Awareness, Interest, Decision, and Action.

The sales funnel represents a customer’s journey from the awareness stage to purchase. It helps businesses cater to customer needs, enhancing conversions and loyalty.

The sales funnel is still vital in today’s digital marketplace. Implementing a sales funnel strategy is essential with the rise of online shopping and multiple platforms.

Finding examples of effective sales funnels within your niche involves a process known as funnel hacking. Here’s how to do it:

  • Research: Identify successful businesses in your niche. Visit their websites, subscribe to their emails, and follow their social media.
  • Purchase a Product: Buy a low-cost product or sign up for a free trial to understand their sales funnel.
  • Analyze Their Strategies: Study how they guide you through their sales funnel. Learn from their content what works and what doesn’t.
  • Implement Learnings: Apply these lessons to your funnels. Adapt the strategies to your business instead of copying them.

Every business is unique; what works for one might not work for another. Continuously test and optimize your sales funnel to suit your business and customers.

A lead-generation sales funnel is a marketing strategy that boosts brand awareness and helps businesses gather leads. Usually, it includes directing traffic to a squeeze page and incentivizing prospects to share their email address.

Sales and marketing funnels are similar but have different roles in a sales strategy. A marketing funnel covers the entire journey from brand awareness to purchase. On the other hand, a sales funnel focuses on the process leading to a sale.

‘Sales pipeline’ and ‘sales funnel’ are different aspects of sales strategy. A sales pipeline maps the journey from initial contact to purchase. In contrast, a sales funnel assesses conversion rates at various stages.

A sales funnel manager optimizes business sales strategies. They analyze performance, identify issues, and enhance conversion rates to ensure a seamless customer journey and increase company revenue.

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