What is a Sales Funnel? Definition and Step-by-Step Tutorial

A sales funnel is a process used to guide prospects through a series of steps before they become buyers. It helps you identify your ideal customer, what they want, and how you can provide value to them.

Sales funnels are also known as lead generation systems. They are used to capture and convert leads into paying customers.

If you’re looking to start a new business or improve an existing one, then you’ll definitely benefit from learning about sales funnels.

Let’s take an in-depth look at what a sales funnel is.

This article contains affiliate links. If you follow them and then make a purchase, I may receive a commission at no additional expense to you. Thanks for reading!

What is a Sales Funnel and How Does it Work?

A sales funnel can be broken down into a series of logical steps. This makes it much easier to understand, and is convenient for assigning different roles to members of a marketing team.

Awareness

The first step in the process is called awareness. This means that someone has heard about your product or service. You can spread awareness by using any number of methods including:

  • Social media ads
  • Organic social media posts
  • Search engine optimization
  • Blogging
  • YouTube

Once people have been made aware of your brand, you need to keep them interested. That’s why the next stage is called interest.

Interest

Interest happens when potential buyers find out enough details about your company’s products and services to make them curious about buying. Interest could come from anything such as reading reviews on Google, visiting websites, watching videos, or following on social media.

Desire

This is where things get interesting! Desire occurs when interested parties actually visit your offer. If visitors don’t see exactly what they were searching for, they may leave without taking action. However, if they do decide to continue browsing, this is when you present your offer with a clear call to action.

Action

Action is where most companies fail. Many businesses assume that once someone visits their site, they will automatically buy. But not everyone buys right away. In fact, some people might even bounce off after seeing just one page. That’s why using multiple calls to action throughout a page is ideal.

But action is not (really) the final step of the full sales funnel.

AIDA sales funnel

Customer Retention and Lifetime Value

Customer retention is all about keeping current clients happy so they keep coming back. Once you’ve captured a client’s payment, now comes the hard part—keeping them around long term.

Lifetime value refers to the total amount of money a person spends over time. For example, let’s say I spend $100 every month on coffee. My lifetime value to my favorite supplier would equal $1,200 per year.

The trick to master customer retention and keep everyone happy is to exceed their lifetime value with the value you deliver. So if a client’s lifetime value is $6000 per year, you should aim to provide at least $12,000 in benefits to their business through your products or services.

Having a recurring payment model is one of the easiest ways to keep your income consistent, but it means that people need to make the decision each month to continue paying you.

Marketing Funnels vs Sales Funnels – What’s the Difference?

When you look at the details of their content, marketing funnels and sales funnels have different purposes. However, from a big-picture perspective, they can be considered two parts of the same whole.

The marketing funnel is responsible for “top of funnel” activities such as attracting the audience via content marketing, paid ads, or other means. It also includes lead generation and nurturing these leads until they become customers.

Sales funnels are used to convert those prospects into actual customers. They include everything involved in moving an individual past the initial stages of interest and desire to the action (purchase).

If we wanted to, we could even add a third “funnel” to this pairing – the customer retention funnel. There’s no point in driving tons of potential customers to your high-converting sales page if most of them end up refunding or canceling

Remember that from a bird’s eye view, everything mentioned above is part of the “sales funnel”. But often as not people will separate the different parts of the sales funnel into more manageable sections.

How to Create a Sales Funnel

Now that we understand what funnels are and how they work, let’s take a closer look at creating our own sales funnel.

(Note: I’m assuming in this exercise that you already have something to sell and have identified your target audience. If not, you may want to start by building buyer personas and customer avatars).

As you create your sales funnel, keep the customer journey in the front of your mind. Adding value at each of the sales funnel stages will help keep the sales process from “feeling” like selling.

After all…

“People don’t like to be sold, but they love to buy.”

-Jeffrey Gitomer

Step 1: Craft Your Offer

Even if you already have a product or service to sell and a well-defined customer avatar, it’s possible your offer may need some work.

ClickFunnels creator Russell Brunson talks about the key differences between an offer and a product or service in his book DotCom Secrets. To summarize, an offer is more than something you sell… an offer is a solution.

Offers often include a bundle of products and/or services. For example, let’s say you want to sell an ebook for $29. If no one is buying it, rather than reducing the price you could increase the value of the offer by packaging other products and services with the book. You could include:

  • Checklists or worksheets related to the book’s teachings
  • Video courses related to the book’s content
  • An audio recording of the book
  • A free consultation to help them get the most out of the book
  • Anything else you can think of!

The mark of a great offer is that it becomes irresistible to your target audience. Just imagine if you added everything I listed above to a $29 ebook bundle – the value of that offer would massively exceed the price. Anyone with an interest in the book would feel almost compelled to buy because of the fear of missing out (FOMO) on such a great offer.

Step 2: Plan Your Sales Funnel

Before you start building out any kind of sales funnel it’s a good idea to literally draw a picture of it. I don’t mean designing the pages, I mean planning the logical flow of events and decisions you want buyers to follow.

This helps ensure that when you’re ready to build things out, you’ll know exactly where each element goes. Plus, having a visual representation makes it easier to track concepts like conversion rates and average order values later on.

You can do this on paper or a whiteboard if you want, but I prefer and recommend using a software appropriate for funnel mapping. This will make it easier to work with and share your ideas.

I usually use Google Drawings for mapping my funnels, but there are a number of dedicated software platforms for this purpose as well. Funnelytics is a massively popular one with a free tier, and LucidChart is another which comes highly recommended.

Funnel maps can be incredibly complex or extremely simple. Don’t feel like you need to make something big and fancy – all you really need is a solution that channels leads from your content or ads to (and through) your sales pages.

Step 3: Build the Pages of Your Sales Funnel

 This is the stage where you need to choose a sales funnel builder software. There are many options, but for beginners I recommend using either GrooveFunnels or Systeme.io.

Both of these platforms have free lifetime tiers, so you won’t be under any pressure to succeed on a schedule. They also both include a number of additional features, such as blogs where you can add blog posts, email marketing, and membership websites.

 If you’re a more advanced user and/or can afford a premium tool right away, you may want to consider Kartra or GoHighLevel. GoHighLevel is the ideal software solution for digital agencies, while Kartra is likely the most well-rounded platform.

A sales funnel typically has at least three pages, but you can get away with two. A standard three-step sales funnel includes a landing page (also called an optin page), a sales page, and a thank you page.

Many additional pages such as upsells and downsells can be added to more complex funnels.

Note: If you’re building an affiliate marketing sales funnel, you only need the landing page and the thank you page. You can turn the thank you page into a “bridge page” by adding your affiliate link to it with a clear CTA.

Step 4: Create a Tempting Lead Magnet and Email Sequence

Once you have your sales funnel built on one of the recommended software platforms, you need to find a way to get people inside of it. The easiest way is to give away something valuable in exchange for their contact information or email address, also known as a lead magnet.

Lead magnets are basically irresistible offers designed to entice visitors to take action and make a small commitment to your business. The best ones are usually either short resources that offer a solution to a specific problem, or longer “ultimate guides”.

The most popular format for a lead magnet is a downloadable PDF which you email to the visitor after they sign up for your list. But video training and other educational mediums can also make excellent lead magnets.

If you use one of the funnel builders mentioned above, it’s likely you’ll be using their built-in autoresponders to deliver your lead magnet. But if you need a separate email marketing platform that integrates with almost everything, I use and recommend GetResponse.

When it comes to creating a PDF lead magnet, the easy way is to just write it up in Google Docs and export it as a PDF. If you want to make something fancier, you can use a software like Designrr to craft a beautiful PDF with a couple of clicks.

I recommend having at least three emails scheduled as autoresponders to go out over the next 3-5 days. Focus on providing more information and free value related to your offer, and always include a clear call to action.

Step 5: Promote Your Offer and Your Lead Magnet

If you set up a sales funnel with at least three pages, you should have a landing page with a free lead magnet offer, and a sales page with a monetized offer. You can promote one or both of these in a variety of ways to make your first sales.

For cold traffic and people just entering the awareness stage of your funnel, it’s usually best to promote your free lead magnet. This will give your leads the chance to get to know you and “warm up” before buying.

If you sell a high ticket product or service, you don’t need sales teams and tons of manual outreach – you just need a solid funnel and an understanding of how to communicate with your target audience.

Let’s say you want to target business owners with your offer; you could promote it organically with different types of content on YouTube, Facebook, and your own blog. You could also run paid ads targeting potential customers who are at different sales funnel stages.

One common strategy is to focus on organic content at the beginning of the customer journey, and then retarget those who visit your pages but don’t buy with paid promotion like Google ads or Facebook ads.

As you promote your offer and your free lead magnet, your email list will grow, and eventually this will make it easier to make sales consistently.

sales funnel blackboard

Copywriting and Content Writing: Keys to Traffic and Conversions

Even if your campaign focuses heavily on video content, it’s almost inevitable that you will spend a lot of time communicating with your customers via writing.

Content writing is all about creating interesting articles or scripts that will increase your prospective customers’ interest in your offer. Copywriting is about encouraging a specific action such as signing up for a list or making a purchase.

Examples of content writing include social media posts, blog articles, and YouTube scripts. Examples of copywriting include the pages of your funnel, marketing emails, and ads.

Successful Sales Funnel Examples

Here are some examples of sales funnels with great copywriting, well optimized processes, and happy customers.

GrooveFunnels: This is a simple sales funnel with a free offer (lifetime membership) and a single upsell (platinum membership). 

Traffic Secrets: This is a book funnel for one of Russell Brunson’s famous marketing resources. It is significantly more complex, with bump offers and multiple upsells.

Jarvis.ai: This is the landing page for the main AI writing software I use. If you sign up for a free trial you’ll be swept into their multi-tiered funnel.

Frase.io: This is the homepage for the main SEO software I use. They currently have a 7-day trial for $1 to filter out people who aren’t ready to make a buying decision.

A Sales Funnel Helps Buyers Make the Right Decision

Ultimately you don’t want the “wrong” people buying your products and services. As much as a funnel is designed to drive people into your sales cycle, it can also be used to filter the “wrong” buyers and let through only qualified leads.

Who are the wrong buyers? People who are just looking for free value (or “tire kickers”), people who will demand refunds or make problems with your fulfillment, and more. It’s not worth the marketing efforts if most of your customers end up asking for their money back!

That’s why it’s important to promote your offer with relevant content and inform your future customers as much as you try to influence their purchase decisions. Honest sales efforts can pay dividends when it comes to getting customer testimonials, and positive reviews are worth their weight in gold.

Ready to get started? Sign up for GrooveFunnels and start planning!

FAQ

Here are some frequently asked questions about funnels.

What is a sales funnel in simple terms?

A sales funnel is the buying process a target customer goes through in order to purchase your product or service.

How do you create a sales funnel?

The easiest way is to get started by following the steps outlined in the body of this article, including signing up for a free sales funnel software.

How do you develop a sales funnel strategy?

One way to start is by determining who you want to help with your offer, how you will help them, and then building out a sales model around a great offer from there.

About Alex

Digital and affiliate marketer - helping you build the business in your brain.

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