You may have heard the ‘sales funnel’ term before and are probably questioning what it is or even better, what does it do?
A sales funnel is the most systematic way to build trust, relationship, and to encourage people to want your brand before making a sale — and it is extremely powerful when done well.
In this guide you’ll learn:
- What exactly is a sales funnel
- How a sales funnels work
- What are sales funnel stages
- How to easily create a sales funnel
- The best sales funnel strategy
Once you understand the science behind this, you’ll see why it’s the best way to build profits and you’ll be able to turn any product or service into a huge success.
Let’s get started.
What is a Sales Funnel?
Before we go any further, it would probably be useful to explain exactly what is a sales funnel and what you’ll be using it for.
In essence, a sales funnel can be imagined as a funnel for clients.
You start with a broad opening to capture as many leads as possible and then you gradually narrow those leads down to only the most engaged and interested customers.
At the same time, you’ll be building trust, engagement, and priming people ready to make a sale.
You can also think about this as a ladder, which each rung taking your customers closer to the top where you’ll eventually try to sell to them.
In practice, what this means is a series of different marketing strategies, each arranged in such a way as to build more and more targeted leads for your business.
So you may start with a simple ad, or a blog post and then move on to an email list, then a ‘free report’, then a seminar, then a small product sale, and then a big sale.
Each of these marketing stages is a rung on a ladder, it’s a little further down the funnel.
And each time a customer clicks on the next link or follows you to the next step, they are becoming more and more likely to buy from you.
Sales Funnel Stages
Like most businesses, you probably rely on attracting new leads, turning those leads into prospects, converting those prospects into clients, and then delivering those clients amazing results.
Many people call this the customer journey, which is essentially the path from complete stranger to paying client.
The customer journey is made up of four core stages:
And now we’re going to break down these core phases that you should get started on in your business today.
This is where you capture the lead. Typically, you’re capturing a lead’s email address, first name, maybe their last name, and sometimes even their phone number.
Now, you’ll see a lot of businesses doing this by giving away a free piece of content, and this is called a lead magnet and it could be:
And depending upon what you actually sell in your business, usually will dictate the lead magnet type that will work best for you.
Now the goal of this stage is to get your ideal prospect to opt in and give you their information so that you can start a conversation.
In order for this to work, you really need to, in your messaging, speak to your ideal prospect’s pain or problem.
That’s what’s going to get them to take the next step so that you can begin the conversation.
Stage number two is all about engagement, where we turn those leads into prospects. This is the beginning stage of qualification.
Now that we have the lead in our world, we want to educate them and show them that we know what we’re talking about when it comes to solving this problem.
This is typically where you’ll see businesses share client testimonials, really hit on the pain point go a little bit deeper, and start to stretch that gap from where someone is at right now to where they want to be, and really leverage their authority and experience and demonstrate that to the new lead showing them that there is a path to solving the problem.
For our business and many of our clients, we like to use webinars or video sales letters in this engagement phase.
Mainly because it asks of a little bit bigger of a commitment from our prospect to kind of engage with us.
If it’s a webinar funnel, we’re asking them to spend 60 minutes. If it’s a video sales letter, it’s anywhere from 15 to 30 minutes.
And it allows us to really dive deep and demonstrate our experience and show our prospects that we understand our problem and invite them on to the next stage of the journey.
And because they’re spending a lot more time with us and because we’re using that time effectively because we don’t want to waste their time, we’re doing our best.
It’s our best opportunity to qualify that prospect for that next step of the journey.
In this stage, you want to take those prospects and turning them into paying clients. If you’re a consultant or an agency like us, you’re probably selling over the phone.
This stage is likely going to be a consultation or a free strategy session.
So in our engagement phase, we want to be inviting them to a phone call or a phone consultation or a web consultation, possibly even an in-person consultation, where we’re going to invite them to become a client and really get hired.
But depending upon what you sell, you might sell directly from a webinar or if the price point is low enough, you might sell directly from a sales page.
But like I said, if you’re a consultant, you’re probably going to use some sort of consultation call. That gives you the opportunity to dive deeper into your prospect’s problem and really identify if you can help them and get hired.
This is the stage where you deliver your client the results. And for some reason, a lot of people actually leave the stage out of the client journey.
But in many cases, this is actually where the relationship starts.
Now leveraging marketing automation to your new client onboarding campaign, in my opinion, is hands down the most effective way to take your time back and create leverage in working with clients.
You can probably go from working with two clients a month if that’s what your capacity was to doubling or tripling that simply by having an effective new client onboarding process.
So here’s the deal, just because you can automate these four key areas of your business, these four key campaigns don’t mean that this all needs to be transactional.
This is the biggest fear we see with a lot of our clients. They think that because they’re automating it, that all of a sudden, every engagement needs to be transactional.
Sales Funnel Examples
There is a good chance you’ll have encountered different sales funnels in your travel around the web: and you may even have purchased products from others through this strategy.
You may have come across a blog and signed up to the mailing list for instance, and then been told to click on the link in order to see a free seminar.
And then maybe the free seminar asked you to sign up for the next seminar which would cost a little money.
And you may have come across it on YouTube too.
Example #1 – Tai Lopez
For example, Tai Lopez is something of an inscrutable businessman who is willing to use everything at his disposal to capture new leads and sales — even when that involves a bit of bare-faced lying (that’s not his car and not his garage!).
But he still employs a sales funnel very well. If you go on YouTube to watch a video, his ad will often pop up.
The guy then goes on to talk about his cars or his massive house and this makes you want to watch — even if only because it annoys you.
At the end of the video, he offers to show you how to get his 3 essential tips for making money online.
And because it’s free, why wouldn’t you click it?
At this point, you’re becoming more involved with his brand more likely to become a paying customer.
When you watch this video, which is on his site or channel, you’ll then be told you can get even more information by signing up for a free report.
In fact, this report is key to understanding the video. If you do this, then Tai now has your details and the confirmation that you’re interested in what he has to offer.
You’ve gone from a ‘cold lead’ (somebody on YouTube, targeted based on your video watching choices), to a ‘warm lead’ (someone who is interested) to eventually a qualified lead.
The way Tai does this is a little transparent and a little cynical — but it’s how all the big names operate including the likes of Tony Robbins, Tim Ferriss, and Pat Flynn.
Example #2 – Amazon
Take a look around the web and chances are that you will have come across a large number of sales funnels without even realizing it.
Amazon has probably the largest and most effective sales funnel in the world, have you noticed how items from Amazon follow you around and how you are offered ‘other’ items when looking at one in particular?
And it’s exactly what you should be doing if you want to make sales. Note that this doesn’t mean you have to trick people.
Just that you have to think about your marketing strategy in stages and understand the psychology of the way you’re dealing with people.
How Sales Funnel Works?
Let’s say you are standing on the street and someone you don’t know offers you a watch for $200 — what would do?
You don’t know who this person is, you’ve been given no reason to trust them and you’re probably not going to want to hand over any money.
That’s why companies don’t do this. Instead, they give you fliers. Fliers are things you can choose to accept or throw away — but either way, they don’t cost you anything and you won’t feel that you’re being pushed into anything.
Other stores do something different: they give away freebies.
Walk past Starbucks and you’ll often find them giving away free samples of their new drinks and cakes for you to try. Again, you can easily walk away if you’re not interested and you won’t feel you’re being strong-armed. If you like the free sample though, then you can come in and try whatever else they’re offering.
If you try and sell to people right away on your website though, then you’re the equivalent of someone trying to sell thousand-dollar watches in the street.
And if that’s the only thing you’re offering and the only way that your visitors can engage with you, then they’ll just leave, giving you no way to contact them again and to get them back.
As you may have noticed, this is a bad strategy…
Try to imagine it from their perspective: they have typed ‘fitness tips’ into Google, found your page essentially by accident and now you’re trying to sell them your training program for $500.
People don’t make decisions on that basis. They’ll see you’re trying to sell them, write you off as spam and then leave.
Now imagine the alternative: the sales funnel technique.
They do the same thing: they type in ‘fitness tips’ and they land on your website where they get some great information.
That information is unique, interesting, and useful but at the bottom, it tells the audience that if they want more tips — your ‘5 Most Powerful Tips To Lose Weight’ — then all they have to do is to enter their details to receive your free guide.
There’s very little reason for them not to do this: you have demonstrated that you’re able to provide value and you’re offering something for free.
The only price they pay is to allow you to contact them in the future — but as you will point out, they can always just unsubscribe if they don’t want to hear anything more from you.
They get their free report and once again, they find it is really good. At the same time though, they’re now getting emails from you — emails with highly engaging and interesting subject lines.
The people who click those emails are now showing good engagement and you can see that they’re the kinds of people that might be willing to purchase from you.
These people will receive an email on an automated basis that invites them to an exciting free conference where they can hear you talk online about fitness.
This is a great, rare opportunity and if they like what you’ve done so far, they should definitely get engaged. They do that and because they’ve gone so far out of their way to hear you and they’ve listened to the whole thing, they’ve now made the full transition to the fan.
They are now engaging with you in a big way and going out of their way to hear more from you. This makes a massive difference because in their own mind it will inform them that you are someone they’re interested in hearing more from.
Sales Funnel: Best Strategies
Hopefully, you now understand how a sales funnel works and why it’s such an important tool for maximizing your sales.
At the same time though, it’s worth noting that the steps themselves don’t need to look like this. You might not yet have a mailing list, you might not have a seminar — but you can still create a funnel.
What’s important, is simply that you have a series of escalating ‘steps’, with each one increasing engagement and building your fan base further.
So the question now becomes: how many steps constitutes a ‘funnel’? While this varies from case to case, the best answer is five.
That’s because research tells us that it takes five touches to sell to someone.
This means people should interact with your business at least five times before you try and sell your high-ticket item.
This is enough to take someone from being completely unaware of your brand, to being familiar enough with you that they are willing to put their money and their trust in your products.
How To Build a Sales Funnel That Works [7 Tips]
You’re stoked now, right? You want to create a sales funnel now — and fast. Don’t worry. It’s not as difficult as it might seem.
A lot of times people think that sales funnels need to be really complex, and they really don’t have to be. But you do need to follow a few specific rules so that they can be successful for you in your business.
#1. Think Like Your Prospect
Here’s the deal, you can dream up this cool funnel and all this cool copy. But if you don’t talk like your actual prospects and your clients, it’s never going to resonate with them.
So what I recommend is to do some research, have conversations with existing clients. Look at your sales calls that you’re having, look at the problems that people are saying that they have in different communities on Facebook, and places like that.
Really start to understand how your ideal prospect actually thinks. What keeps them up at night? What are they embarrassed to tell their family at the dinner table when they go home?
Those are the sorts of things that you want to leverage in your marketing and your messaging to really have those prospects sitting there saying, “Wow, he’s talking to me“, that’s what we need.
In order to do that you really need to start thinking like your ideal prospect, and speaking like them too.
#2. Break Sales Funnel Into Mini Goals
Tip number two is to break your entire sales funnel down into mini outcomes, or mini-goals, clearly defined goals.
From someone who is a complete stranger to who you want to end up to be a paying client, there are probably multiple steps along that journey that they need to take to become a paying client.
So I want you to break down each of those steps into a clearly defined goal.
Goal #1 – Registration
For example, if you have a Facebook ad that drives into a webinar, whether it’s life or on-demand, it doesn’t matter. That registration is the first milestone.
So you want to be able to successfully take someone from your Facebook ad to a webinar registering – mini outcome number one.
Goal #2 – Attendance
Now that they’re registered, you want them to attend the webinar so they can get all the value that you’re giving on that presentation. Did they attend? Or did they not attend?
Goal #3 – Taking Action
Goal three would be, did they take the action that you asked for on the webinar? Maybe you were driving into a consultation or inviting them to a strategy session. Did they apply? Did they schedule a consultation? That’s the next outcome.
Goal #4 – Purchasing
And then finally, did they buy? That’s the final outcome.
So you can see that from Facebook ads to paying clients there are mini-goals along the way that allow us to track their progress.
#3. Track Outcomes
That brings us to tip number three, which is to track the mini goals track those mini outcomes.
If you have five steps across your entire client journey, you’re really looking for five specific different touchpoints.
How well are you getting someone from a Facebook ad onto your webinar?
How well are you getting them from the webinar into scheduling a call and from call to close etc.?
When you’ve broken down your entire sales process into mini-steps, you’ve identified the exact metrics that you need to track to understand how successful you are in getting someone from Facebook ad all the way to client or from stranger to paying client.
#4. Implement with a System
Look whether it’s you or someone else building your sales funnel, you need to have someone working with a standardized and repeatable system when it comes to implementation.
So that when you look at your sales funnel, two months from now, six months from now, a year from now that you still understand and can really interpret what’s happening in that funnel.
I like to think of it as a language. You’re always going to use the same campaign naming methods, tag naming methodologies, and frameworks.
If you always use those same things, and then you hand that over to anyone that ever implements in your business, all of your campaigns will always be implemented exactly the same with the same standards that allow you or anyone on your team to refer back to the documentation and actually know what’s going on in your sales funnel.
#5. Launch and Wait
Tip number five, is to launch and wait. That’s it, wait, give it some time.
You need to wait enough time for leads to start coming into your sales funnel so that you have enough data to make educated decisions on where to go next.
Because we built our sales funnel in multiple stages, we will know exactly what is broken and what needs to be fixed, and what doesn’t.
All we need to do is give it some time.
I would recommend that you have at least 100 leads go through your sales funnel before you make any changes.
That’s copy changes, landing page changes, design changes.
Before you make any changes, let 100 leads go through your sales funnel.
#6. Adapt and Adjust
Now that we’ve waited, now that we’ve had leads go through the system, we should see what parts are working and what’s not.
And because like I said earlier, we built our entire sales funnel down into mini-goals and mini outcomes, we really start to understand what areas are broken.
For example, if you have tons of people clicking on your ad, but they’re not registering, you have a “disconnect” between your Facebook ad and your registration page.
Even if you look at the entire sales funnel, and then you say, “Wow, our sales funnel is generating a lot of conversations, we’re generating 20% of everyone that attends our webinar to get on the phone.”
That could be working great. But if you can’t get enough people on your webinar in the first place, that’s the part that you need to fix.
So once we have enough data going through, and we look at the different metrics for each of the mini outcomes within the entire sales funnel, we know exactly what to fix and what to fix first, and what not to touch because it might already be working.
#7. Just Make it Better
Now that we’ve had data coming through, we understand what parts are broken and we go fix those, we can make it better over time. As more data keeps coming through, we’re going to be able to make more educated decisions.
Far too often, we see people just set it and forget it. And that is not the case here. Yes, we’re using marketing automation and tools to have these systems running while we sleep or while we’re doing other things in our business so that we have leverage.
But it’s not a set it and forget it sort of thing. You want to always be checking back, looking at the metrics across the entire journey, and continually making changes to make it better.
So if you’re going to be building a new sales funnel for yourself, or for a client, follow these seven steps and I promise you that your life will be a whole lot easier because you’re going to have all the insight into what’s actually working and you’ll end up having a sales funnel that actually works.