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What is a Sales Funnel?

by Matthew Carter | Last Updated: October 26, 2023
What is a Sales Funnel?

In this article, we will explain what a sales funnel is and how a sales funnel works. We will also discuss the benefits of using these types of marketing funnels and how automated funnel building software can save you time and increase your revenue.

In marketing, there are two concepts known as the customer's journey and the sales funnel. The term "customer's journey" refers to the several steps customers take from initial contact with a business to the point of purchasing.

Take, for instance, someone looking to purchase a pair of shoes but has nothing in mind particularly. They see an advert for a pair of shoes and fall in love with them. The store's address is in the ad, so they go to the store to check things out.

sales funnel stages

On reaching the store, they are met with several other shoes as captivating as the one in the ad. Then they start browsing the shelves, admiring and comparing different pairs.

A salesperson goes over to the shopper to offer his assistance and after some minutes, the shopper walks out of the store with a pair of shoes. This is a typical example of a customer's journey, and it is tied into the sales funnel.

What is a Sales Funnel, and How Does it Work?

The sales funnel is a model or series of marketing strategies designed to intentionally guide passive browsing traffic through to the point of a sales conversion, i.e., when they make a purchase.

what is the sales funnel process

A sales funnel aims to ensure that every customer's path in their journey is as smooth as possible and reduces the chances of a customer changing their minds before they buy.

Good converting funnels work by resolving any and all questions that a customer may have and are efficient in providing them with an opportunity to purchase.

Top, Middle, Bottom Funnel Explained

A typical sales funnel comprises three parts known as the top, middle, and bottom of the funnel.

The top of the funnel is the widest part representing the "awareness stage" in the sales funnel design. This is the stage where a potential customer discovers the existence of a company. In the example above, this is where the shopper sees the ad in the magazine.

Next is the middle of the funnel, which is smaller than the top because fewer customers make it to this stage. In our example, this is where the shopper goes to the store for the shoe they saw in the ad.

Last comes the bottom of the funnel, which is the tiniest. It represents the conversion stage, i.e., the shopper is converted from a cold prospect (passive traffic) to a customer. A well-built marketing funnel will also include a way for that customer to become a 'member' to encourage future repeat business.

stages of sales pipeline

The sales funnel design is likened to a physical funnel because the number of people who make it to each stage is smaller compared to the previous stage. The loss of customers at each stage is due to several reasons, including customer budget, loss of interest, difficulties in the process, stock issues, etc.

What is Sales Funnel in Digital Marketing

In the traditional sales funnel process, salespeople gather prospects' contact information and begin a series of cold calls and cold emails until the prospects either buy or tell them to stop contacting them.

Sales funnels in digital marketing work off a similar principle but are managed online. In digital marketing, you can build sales funnels using software tools known as online sales funnel builders.

Online Sales Funnel Builder

For a basic online sales funnel, you will need a landing page that serves as the funnel's entry point. The landing page will contain the sales copy and a form where passive traffic can provide their email details in return for an incentive.

best funnel landing pages

Once you've collected a potential customer's contact details, you can start forming a relationship with them using automated emails. This process helps establish trust in the hope that they become paying customers and eventually long-term members.

While you can manage the customer relationship and shopping experience separately using different tools, you're better off using a specifically designed online sales funnel builder.

An online sales funnel builder is a marketing automation tool that offers all the tools you need to create an online presence and design powerful online sales funnels using a single dashboard. An excellent example of a high-quality, integrated and complete sales funnel builder is ClickFunnels.

click funnel marketing campaign

Best online Sales Funnel Builders

ClickFunnels - All of us here at Hustle Life rate ClickFunnels as the best funnel building software on the market

Kartra - Coming in Second is the versatile well-rounded eCommerce offering from Kartra. If you want to learn more read our in-depth Kartra review.

GrooveFunnels  -  A great all-in-one marketing suite that has all the required tools to manage and grow your eCommerce business.
Unbounce - Easy to use page builder with lots of third party integrations available
Leadpages - A cost-effective  basic option for creating landing pages to drive conversions

Sales Funnel Stages

ClickFunnels' success as an online sales funnel builder is a result of an easy user interface that allows you to create complex funnels using easy drop and drag functionality!

More importantly, though, ClickFunnels is a highly refined tool that promotes a give and take relationship between the company and the target consumer to drive engagement and increase the chances of conversion.

There's a great deal of customer psychology involved, but with a quality funnel builder, the thought and work are done for you and takes your customers through a series of stages.

Pre-Stage: Create Your Offers

First, you'll have to define every incentive you'll be offering along the sales funnel as your prospects move through it from the beginning to the end. These offers are what will keep you interested in the sales funnel process.

Stage 1: Traffic

At this stage, you have to be very intentional with your targeting to ensure that you're bringing the right people into your funnel. If you have people in your funnel who have no interest or need for your product, they won't convert. It's just logic.

Stage 2: Bait

standard sales funnel

Also known as the lead magnet, the bait is offered for free or at a discount because most people feel great about getting something for FREE! The typical gifts on offer are free ebooks, cheat sheets, webinars, workshops, free trials, free consultations, promos, sales, etc.

Stage 3: Front End Offer

Following the bait comes the front-end offer. This is a low price offer that customers consider low-risk and something they can quickly decide on.

The customers that take you up on the front-end offer are now prepped and in a better mindset to consider more premium offers, and you can move them to the next stage of your marketing funnel.

Stage 4: Middle Offer

sales funnels

The way it usually works is that right before they checkout, you provide an offer that will increase the value of their initial order. For example, a web hosting service might offer you a longer subscription length for a discounted rate, e.g., 15% off 1 year, 30% off 2 years, etc.

The goal is to maximize the opportunity at hand (while the customer is in a "buying mood") to increase your revenue while still providing value to your customers.

If they don't take the upsell, you quickly change tack and offer them a downsell (usually a smaller or cheaper version of the upsell).

Stage 5: Backend Offer

This would be your most expensive product or service that customers can get even more value from. The goal is to turn new low-tier customers into high-value customers by moving them up your chain of offers.

This part of the funnel is usually only offered to a customer AFTER they've already bought and tried something from you. By this time, they've gotten a taste of your product or service via your lower-tiered packages, and you'll have had a chance to build upon your relationship.

Over time, the more you invest in your customer relationship management, the more likely they'll recognize your brand and establish loyalty to you.

Sales Funnel Examples

Everyone who has ever bought something has been in a sales funnel, even though they may not realize this. Here are three popular examples of a sales funnel:

1. Amazon's Upsell

sales funnel examples

When you're on a product page on Amazon, there's a particular section where you see something like product + product + product = $xyz.

Amazon's goal here is to increase sales and revenue by offering products related to the one you're viewing for a discount if you buy them together.

2. Car/Electronics Downsell

Downsells happen a lot with car dealerships and electronics purchases. If you go to a gadget store for a MacBook but couldn't afford it, the salesperson will quickly bring up a list of many other options that cost a lot less just to make sure they get a sale off of you.

3. Restaurants' Upsell

Anyone who's been to a restaurant has heard the phrase "and would you like a so so so with that?."

purpose of a sales funnel

Waiters at restaurants are trained to always upsell to customers by offering a product that compliments their current order. The offer could be a beverage, a soda, or an offer to "upgrade" their order for a lower price.

Like in all these examples, the goal is to increase sales and revenue.

Why Use a Sales Funnel?

why use clickfunnels

A whopping 75% of marketers are reported to have automated some part of their processes. You can benefit from automating your sales funnel in the following ways:

Building a customer base. 100% of the time, customers are required to give out their contact information. With this, you are always in contact with them and can reach out to them to build a relationship.
Maximizing profit from each sale. With your upsell and downsell offers in place, customers are more likely to buy more than they planned to.
Assist with membership and repeat business. Another advantage of a sales funnel is that it is designed to bring repeat business from your customers via different strategies which you've set up.
Customer follow-up. Whether your prospective customers have purchased or not, automated direct emails and messages will keep you in their minds for future patronage.
Reduction in advertising costs. Using a sales funnel saves a ton on advertising costs since you have your prospects' contact details, and you can reach them directly. Without having to pay for ongoing cost per click (CPC) advertising!
sales funnel upsell templates

Final Thoughts

The world is changing, and trends continue to indicate that more and more people prefer to browse and shop online.

Even traditional brick-and-mortar businesses are choosing to make first contact with customers via an online presence. But with all the online competition, successful business owners and marketers know that having a website isn't enough to convert frugal and astute customers.

Sales funnels appear to be just like websites but are structured to SELL and not just offer passive information.

Good funnel building software like ClickFunnels uses drop and drag features to create complex funnels that (once set up) will virtually run automatically, with minimal effort from you.

In this 'What is a Sales Funnel' article, we've tried to answer the important questions and explain the benefits of using marketing funnels to interact with customers and increase sales revenue. If you want to learn more, our in-depth ClickFunnels Review is a great place to continue your journey!

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