What is a sales funnel? How to build a sales funnel to win more deals?

Isn’t it interesting to find out how businesses guide you from being interested to purchasing? Well, that’s where the magic of a sales funnel comes in!

When it comes to the entire sales journey, from discovering a potential customer to closing the deal. Every company does it a bit differently based on its unique sales approach.

In this blog, we’re going to reveal the different stages of a sales funnel. We’ll discuss some tips on creating one and understanding why it is so important for any business. 

We’ll also take a 360-degree approach to managing a sales funnel and how to patch up any leaks it might have.

So, stick around and discover the secrets of creating, managing, and measuring a successful sales funnel.

What is a sales funnel?

As the name suggests, a sales funnel resembles a regular funnel, with its broadest opening at the top gradually narrowing towards the bottom. 

Each stage of the funnel will either push the prospect down the funnel or remove them from its list if there’s a gap in the fitment. 

 A sales funnel may look different for different businesses, but their underlying format is the same. 

Broadly, a sales funnel is divided into three main categories: top, middle, and bottom. 

Each stage of the sales funnel is designed to fulfill varied objectives. From discovering your brand to purchasing, it goes through several stages of communication to answer your prospects’ concerns during their journey. 

The division of each stage can be further defined under the 3 Cs of a sales funnel as follows: Connect > Converse > Convert, as shown in the image.

Sales funnel stages

Why sales funnel is important

Defining your sales funnel will help you spot the problems with your prospecting. You can know at which stage your prospects are dropping and why. 

This gives you insights to improve your sales process or communication at each stage. 

With a sales funnel, you can address prospects’ key concern areas with the right set of messages.

You can scale your sales and make revenue projections using a sales funnel. 

A well-defined sales funnel helps improve the customer journey and uplift company performance

Sales Funnel Stages

Let’s understand the various sales funnel stages, and learn about each stage of the sales funnel and discover ways to leverage this to your advantage. 

How you want to set it up depends solely on you. You could break up a stage into multiple stages. It is your prerogative to understand your own customer journey and engage them with the right messaging at the right time. 

Stage 1:  Awareness

This is the first and the widest part of the sales funnel where anyone can be a potential customer. 

However, only the interested customers will go through the rest of the sales funnel stages depending on how you nurture or engage with your leads/prospects at each stage. 

There are many ways you can make your leads push down to the next stage. Remember, they are still evaluating the challenges at this stage. 

An example of this sales funnel stage would be when prospects discover your brand for the first time and out of curiosity, visit your website. They are looking for solutions, going through your offerings and trying to make a fitment between your promises and their problems. 

They may click on an advertisement, peruse your blog, discover your website through a Google search, or hear positive discussions about your brand.

Stage 2: Interest

At this stage where customers after learning about your brand will start evaluating. They will make their own competitive analysis and see if your solution will meet their needs. 

They tend to dive deeper into the specifics of the problem. They are considering all the solutions the market offers. 

This is the stage where you need to guide them with insights and help them decide if your product is of your offers are the right fit for what they’re looking for.

Stage 3: Decision

At this sales funnel stage, prospects will consider the pricing and packaging options your brand offers. Sales pages, webinars, and calls play pivotal roles in influencing prospects towards a purchase decision.

At the end of the funnel, your leads now understand their problem, know the best solution, and are ready to pick a provider. At this point, their questions are specific to choosing a vendor, forming the narrow bottom part of the funnel. 

Stage 4 Action

At the end of the funnel, your leads know what their problem is, the best solution, and now they’re ready to pick who to buy it from. In this stage, their questions are all about choosing a seller, and they get more specific, like the narrow part at the bottom of a funnel.

For the bottom of the funnel, the most effective content includes frequently asked questions, live demos, videos highlighting product features, and comparisons with competitors. These will strengthen their confidence in your offer by showing how it precisely addresses their specific problem.

At this stage, your qualified leads move into the sales proposal and negotiation phases. Ideally, this leads to winning their business.


In this blog, understand what is a sales funnel. Learn why do businesses need a sales funnel. We have touched base on various aspects of a sales funnel in detail. 

Find out from our blog how does it work? Learn the nefits of a sales funnel. kNow different stages of a sales funnel. 

Learn step-by-step how to build a sales funnel and make your conversion game do the magic. Besides, our blog has also captured examples of an effective sales funnel and discussed in detail to spot the cracks in your dales funnel. 

Understand the most important metric when it comes to evaluating the success of your sales funnel. Learn how to optimize it followed by a series of FAQs. 

How does a sales funnel work?

As previously described, a sales funnel starts with a broad group of potential customers who become aware of your product and systematically guides them toward the bottom, where a smaller group ultimately transforms into paying customers.

To get a better understanding of how a sales funnel works, let’s explore the sales funnel of a premium online clothing brand


The journey starts as soon as Michele hits the brand’s website, which she discovers after seeing its collection through an influencer’s post on Instagram. She landed on the website after clicking the link from the bio. 

Interest and consideration 

Upon entering the site, Michele finds an opportunity to join the brand’s VIP club by subscribing to their newsletter. 

In return, she gets an exclusive early look at upcoming collections and a first-purchase discount. She signs up and becomes a lead.


After signing up, she receives a welcome email explaining the benefits with the discount code. 

Next, a series of emails are received with new arrivals, styling tips, and behind-the-scene content, keeping her engaged.

Her constant engagement with the brand through its website gradually transforms her from a lead to a potential prospect genuinely interested in purchasing. 


After seeing the quality and style, Michele frequently visits the website to explore new collections and limited-time promotions.


Finally, the brand sends her a limited-period offer with a limited collection exclusively for VIP customers. 

With this and her accumulated discounts, she makes her first purchase from the brand and becomes its customer. 

Her entire journey from a visitor to a paying customer is managed by strategic email marketing, exclusive offers, and a focus on building a long-term relationship with the customer.

Benefits of a sales funnel

The effectiveness of your sales funnel depends on its design and implementation. Customize it to your specific business and target audience to reap the maximum benefits. Mentioned below are key benefits

Increase in efficiency and productivity

  • Sales funnel identifies and nurtures leads likely to convert, saving your team time chasing unqualified prospects.
  • Each stage has clear actions and metrics, guiding reps through the customer journey efficiently.
  • Repetitive tasks like email follow-ups can be automated, freeing up your team for more strategic work.

Improve conversions

  • The funnel keeps potential customers engaged with valuable content and personalized outreach, increasing conversion chances.
  • Right message at the right time to address specific concerns and needs, making offers more relevant.
  • Analytics highlight weak spots in the funnel, allowing for adjustments to optimize the conversion process.

Additional Benefits:

  • Sales funnel helps forecast future sales, allowing for better budgeting and resource allocation.
  • Consistent nurturing throughout the sales funnel fosters trust and loyalty.
  • As your business grows, the funnel can be easily adapted to accommodate new products or target audiences.

Let’s discuss some of the secrets to making a sales funnel that attracts all the spotlight:

Marketing and Sales in Perfect Harmony

Let’s say, a customer has questions, but they’re not quite ready to talk to a salesperson.  It’s the marketing team that can share the info the customer craves. A top-notch sales funnel ensures this works like a charm, answering queries and building connections before the big sales finale.

Saving time and effort

Think of your sales funnel as a lighthouse in a sea of opportunities guiding each ship (your prospects) to the shore. No wasting time on bad leads! It’s like having your marketing team spotlight on leads that are ready to seal the deal.

A sales funnel is not just a functional mechanism to sell but a true showstopper in your marketing performance.

How to build it?

Building your sales funnel need not be a herculean task. With an understanding of your prospects and their problems, you can easily make one to monitor your customer sales journey 

Building a sales funnel means communicating with your prospects at the right time with the right piece of information that will help them move on to the next stage of the sales funnel similar to opportunity pipeline. 

The opportunity pipeline illustrates the progression of potential deals from initial contact or lead generation through to closing a sale.

In a sales context, an opportunity typically refers to a qualified lead or a potential deal that has a realistic chance of converting into a sale.

Know your existing customers 

This is the most crucial step to build your effective sales funnel. Understand your current customers, their problems, desires, and aspirations. Find out what bothers them the most. How their psyche works. 

Talk to them, and study how they interact with your online and offline stuff. This info helps you find more people like them and share the right messages to attract new customers at the right time.

Establish goals

Now that you know your customers, it’s time to establish sales goals. 

This will help separate your sales funnel stages into top, middle, and bottom. Then define at each stage what sort of interaction your customer should make and with which objective.

  • Top of Funnel: Increase traffic to a specific page on your site.
  • Middle of Funnel: Enhance engagement during outreach.
  • Bottom of Funnel: Double conversions.

Create a landing page

Make your first impression through a landing page that captivates your customers and tells your visitors about your company, what you offer, and the problems you can solve.

Catch customers’ attention to drive them to your sales funnel. Share helpful and interesting stuff that shows you know what they need. 

Make use of social media posts, blogs, emails, and SEO, or by paying for ads on social media, using specific keywords, or getting influencers involved. The goal is to make them curious and want to know more.

The objective of a landing page is to tempt them with special deals and collect contact info like email addresses. 

Most importantly, the landing page should have a clear instruction that guides the prospect to the next step in the sales funnel.

Encourage action

A crucial step in creating an effective conversion sales funnel is to have a clear and purposeful call to action at the end.

Pushing for a sale too quickly might bother your buyer, yet waiting too long could lead them to choose a competitor.

Timing is crucial, so make sure to get it right!

How you present the sale is just as important.

You can follow the tips:

  • Keep your submission form easy and clear without making them fill in too many fields.
  • Offer some value before asking their details, The principle of reciprocation is a powerful way in marketing to make people do what you want.
  • Define the next steps clearly so that thy are not lost at any given point during their engagement with your brand.

How to spot cracks in your sales funnel?

Once you made the sales funnel, the next step would be to manage it properly. It’s no wonder that even the most potential prospects may leak if not engaged or nurtured correctly. 

The best way to prevent such leaks is to define the sales process step-by-step as shown in the pic.

Sales process

You begin with prospecting and marketing at the first stage of your sales funnel. Further, break each stage into sub-steps. For example, a demo stage means contacting the customer, sending reminders, doing the demo, and then following up. 

Once you know the stages of your sales funnels it’s important to spot the cracks at these stages. 

Start asking questions like:

  • Spot the bottlenecks in the sales process
  • Where most potential customers drop off
  • Understanding  the positive triggers at each stage that convert into successful sales. 

Once you spot the cracks it’s time to fix it and get going forward.

Examples of a sales funnel

Consider a sales funnel for a tech company specializing in making smart home devices. 

The primary target audience are the tech-savvy individuals aged 25-45. 

They are often found to browse tech forums and blogs. Knowing this, the company strategizes to capture their attention.

With this objective in mind, the company initiates a series of targeted ads on tech forums, showcasing the innovation and practicality of the ir smart home devices. 

These ads redirect users to a dedicated landing page with an interactive quiz, prompting visitors to discover their ideal smart home solutions. 

To unlock personalized recommendations and exclusive updates, users are encouraged to sign up for the company’s newsletter, transitioning them from visitors to leads.

Next, these leads receive newsletters featuring informative content about the latest trends in smart home technology, user guides, and success stories from customers who have transformed their homes with the company’s devices.

As the email series concludes, the company rewards these leads with a limited-time discount on their flagship smart home kit. 

This inspires prospects to consider the company offer and finally convert into customers by making a purchase.

This whole journey is nothing but how companies leverage by delveloping a sales funnel and defining each stage of the funnel, identify what to communicate and when.

Measuring success

A sales funnel is an ever-evolving dynamic tool. The size, shape, and steps may change depending on your current demand sales goals or as products and services diversify with time and trends. 

A well-defined sales funnel goes through evolution and periodic evaluation.

Performance is another aspect that should be considered while tweaking your sales funnel. 

Conversion rate is one of the most important metrics to fall for while evaluating your sales funnels. 

As a marketer, you need to know how many visitors are being converted into leads, how many leads into prospects, and how many prospects into paying customers.

A few important metrics are discussed below:

Conversion Rates

Track the percentage of prospects that move through each stage of your sales funnel. This includes the conversion rate from leads to opportunities, opportunities to customers, and any other relevant stages in your specific funnel.

Lead Velocity

Measure the rate at which new leads are entering your sales funnel. This metric provides insights into the growth or decline of your potential customer base and helps evaluate the effectiveness of your lead generation efforts.

Sales Cycle Length

Determine the average time it takes for a lead to progress through your sales funnel and convert into a paying customer. Understanding the sales cycle length helps in refining strategies and making the process more efficient.

Customer Acquisition Cost (CAC)

Calculate the cost associated with acquiring a new customer. This includes expenses related to marketing, sales, and other resources. Monitoring CAC helps ensure that your customer acquisition efforts are cost-effective.

Customer Lifetime Value (CLV)

Evaluate the total revenue a customer is expected to generate over their entire relationship with your business. CLV helps in understanding the long-term value of customers and guides decisions on resource allocation and customer retention strategies.

Churn Rate

Keep an eye on the rate at which customers leave your funnel at various stages. A high churn rate may indicate issues in customer satisfaction or the need for adjustments in your sales and marketing strategies.

Pipeline Velocity

Measure how quickly leads move through your sales pipeline. This metric takes into account both the conversion rates and the time it takes for leads to progress from one stage to another, providing a holistic view of your sales process efficiency.

Win Rate

Analyze the percentage of opportunities that turn into closed deals. A high win rate indicates effective sales strategies and a well-optimized funnel, while a low win rate may signal areas for improvement.

Opportunity-to-Win Time

Assess the average time it takes for an opportunity to convert into a closed deal. Understanding this timeframe helps in streamlining processes and addressing any delays in the sales cycle.

Funnel Drop-Off Points

Identify specific stages where leads commonly drop out of the funnel. Pinpointing these drop-off points allows you to address potential obstacles, refine messaging, and optimize the overall user experience.

Tracking these metrics will help you realize where you need to make the improvements and keep your sales funnel healthy.

How to optimize your sales funnel

Try different things and track results to see any changes in your conversion rates. 

The points at which visitors become leads, leads turn into prospects, and prospects into customers need to be identified. 

These touch points are then nurtured with proper content engagement answering prospects’ concern areas. 

Conduct A/B testing and understand your most effective channel or communication or landing pages that give you the best results. 

Optimizing your sales funnel is a constant process that needs to be aligned with your overall sales objectives.

Final thoughts on sales funnel

A well-structured sales funnel is crucial for better sales conversion. 

It guides potential customers seamlessly from awareness to purchase, providing businesses with invaluable insights into consumer behavior. 

However, your sales funnel is not a one-time success story. It needs to be evaluated with changing business dynamics. 

You must adapt and optimize regularly based on data and evolving market trends. 

The goal extends beyond a one-time purchase – it’s about fostering lasting customer relationships through post-purchase engagement and loyalty initiatives.

Frequently Asked Questions

1. What is the difference between a sales funnel and a marketing funnel?

While there is an overlap between the two concepts, the sales funnel is a subset of the broader marketing funnel. 

The sales funnel specifically addresses the steps involved in making a sale, whereas the marketing funnel encompasses the entire customer journey, from creating awareness to post-purchase engagement.

2. Who needs a sales funnel?

Any business or individual involved in selling a product or service can benefit from a well-designed sales funnel. 

It helps streamline the customer journey, provides a structured approach to marketing and sales, and enhances the overall efficiency of converting leads into customers.

3. Do sales funnels really work?

It’s important to note that the effectiveness of a sales funnel depends on factors such as its design, relevance to the target audience, and the quality of the content and engagement strategies employed. 

A well-crafted and optimized sales funnel aligns with customer behaviors and preferences, contributing to successful customer acquisition and retention.

4. What is a sales funnel leakage? 

Sales funnel leakage refers to the points in a sales funnel where potential customers drop out or fail to progress to the next stage of the buying process. 

It represents the loss or “leakage” of leads that were initially engaged but, for various reasons, do not convert into paying customers.

5. When do sales funnels not work?

It’s essential to recognize that sales funnels are not one-size-fits-all solutions. Success depends on understanding the target audience, adapting to market dynamics, and continuously optimizing the funnel based on real-time data and customer feedback. 

Businesses that are flexible, customer-centric, and committed to ongoing improvement are more likely to create effective sales funnels.

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