Building A Sales Funnel: 9 Steps to Build a Solid One

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Introduction

What is a Sales Funnel, you ask? Well, simply put, a sales funnel is just a way of classifying your potential customers based on the level of interest they show in your product or service.

It’s like a roadmap which helps you understand the journey of a prospect from when he sees your or hears your brand to making a purchase or becoming your loyal customer.

Why Do I Need a Sales Funnel After All?

As a business owner, you might have felt the need to put your leads into buckets based on which you can tailor your efforts to entice them to buy your product or service, or retain them by upselling them better value.

A well-oiled Sales Funnel gives you:

  1. Predictability: Sales Funnels are a great way of predicting your future growth.
    A study by CSO Insights shows that companies with a defined sales funnel gain up to 18% more revenue than those without.
  2. Efficiency and Focus: You might have heard your sales teams coming up with “dead leads, who are not interested in your brand.” To filter these window shoppers, and to align the sales teams’ focus on targeting leads who have better chances of conversion, a sales funnel becomes an imperative companion.
    A research by Forrester reveals businesses which nurture leads generate 50% more sales-ready leads at a 33% lower cost. Talk about working smart, huh?
  3. Understanding Your Customers: A funnel helps you understand the mindset of your customer. By learning of their challenge, motivations and decision-making process, you gain invaluable insights as to how probable they are to become your customers. This invaluable insight gives you an edge over others by helping your customer provide the right advice at each step the customer needs to make his decisions.
  4. Data-driven Decisions: Given two choices between guesswork and certainty, which would you choose? If you’re a rational thinker, you’d definitely want certainty in your business. A sales funnel does just that! By showing where exactly in the funnel your customers are dropping off, it removes the guesswork out of the equation and gives a sense of certainty. This will help you come up with refreshed strategies to meet their needs, better offers, or services that might help turn their buying decision in your favour.
Approach each customer with the idea of helping him or her solve a problem or achieve a goal, not of selling a product or service.
- Brian Tracy

How to Build a Sales Funnel

Now that we know what a Sales Funnel is, and how it can help you achieve your business goals, let’s turn our attention to the “How?”.

You might be worried you’re not “business savvy” and would need to read a lot on how to go about building a funnel on your own. Worry not, we’ve got you covered.

Just read along the next section and see for yourself how easy and relatable a sales funnel is.

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Step 1: Define your Ideal Customer Profile

Also called “Persona,” an ideal customer is one who is really the target audience of your product or service.
Would your marketing campaign appeal the same to an 18-year-old college kid looking to buy a cool pair of sneakers as it would to a 40-year-old business executive looking for classic Oxfords?

Develop a detailed profile of your customer with factors like:

  • Location
  • Age
  • Gender
  • Demographic
  • Pain points
  • Needs
  • Income level
  • Education and
  • Spending habits.
    Make use of these factors to craft custom marketing messages and content that deliver value to prospects.

Step 2: Map Your Customer Journey

By now, you have an image of your ideal customer. Now, visualize the ideal path that a prospect takes from becoming aware about your brand to becoming a loyal customer.

A typical customer journey looks like the following:

  • Awareness – prospect becomes aware of the problem or need, and starts looking for solutions.
  • Consideration – The prospect researches potential solutions and evaluates different options.
  • Decision – After weighing in several options, the prospect now makes a final decision and chooses a solution.
  • Retention – The prospect is now a “customer.” And as a customer, he continues to engage and potentially makes repeat purchases.
  • Advocacy – The customer now becomes a vocal advocate, and this is the stage where he “swears by” your products.

Step 3: Define the Stages of Your Sales Funnel

Based on your customer journey, define the distinct stages of your sales funnel. A common way to do it includes:

  1. Top Of the Funnel (TOFU): As delicious as it sounds, TOFU is the Awareness stage, where you’d want to attract a broad audience and generate an initial interest.

Here are some ways to do it:

  • Content Marketing – publish blogs, articles, social media posts.
  • Search Engine Optimization (SEO) – Optimizing your online presence to rank on search engines.
  • Social Media Marketing – Amplifies your presence online.
  • Paid Advertising – Google Ads, Meta Ads etc. help reach your target audience quicker.
  • Public Relations – Use media channels to promote your brand to build a positive perception.

2. Middle Of the Funnel (MOFU): This is the Consideration stage of the sales funnel where the goal is to nurture leads by providing valuable information and positioning your brand as an ideal solution. Some ways to do it are as follows:

  • Lead Magnets – e-books, whitepapers, checklists
  • Email Marketing – Nurturing sequential interactions
  • Webinars and Online Events – To promote your solutions to interested audiences
  • Case Studies and Testimonials – to practically showcase your solution’s capabilities
  • Product Demos and Trials – to entice them by usage

3. Bottom Of the Funnel (BOFU): This is the stage where you convert qualified leads into paying customers. Some efforts in this stage include:

  • Sales Calls and Presentations
  • Pricing Options and Proposals
  • Special Offers and Discounts
  • Customer Reviews and Testimonials

4. Post-purchase: This is the stage where you should aim to retain customers and encourage them to be your advocates and evangelists. Some efforts to this end include:

  • Excellent Customer Service
  • Loyalty Programs
  • Follow Up communications
  • Requesting Reviews and Testimonials
  • Creating a Community

Step 4: Develop Content At Each Stage

Creating valuable content at each stage of the sales funnel ensure your customer gets the right information at the right time. Craft your content for each funnel differently.

  • TOFU Content: Educational and informative content to address their pain points and introduce potential solutions.
  • MOFU Content: More specific content that positions your product or service as a viable solution by highlighting it’s benefits.
  • BOFU Content: Content that directly addresses purchase decisions, like price, features, product comparisons.
  • Post-purchase Content: Useful guides and resources to ensure customer satisfaction and encourage repeat business.

Step 5: Implement Lead Capture Mechanisms

When you capture relevant information about your prospect, you can reach out to them more effectively at different stages in the funnel. You can use:

  • Website Forms – Contact Forms, Signup Forms
  • Landing Page with Lead Magnets – Download pdf, whitepaper etc.
  • Social Media Lead Generation Ads – CTAs like “Call Now”
  • CTAs on your content

Step 6: Set up Lead Nurturing Workflows

When building a sales funnel, nurturing your leads requires lot of efforts which honestly, isn’t ideal for one man to do it all.
Consider automating some aspects of your customer journey, for example, sending out automated emails about latest offers, or whitepapers published, or even reminders about expiring subscriptions.
According to Marketo, nurtured leads make 47% larger purchases than non-nurtured ones.

Step 7: Define Conversion Goals and Track Metrics

Define, implement and monitor specific conversion goals at each stage of your sales funnel.

Here are some key metrics that you can track at different stages in the funnel:

  • Website traffic – TOFU
  • Lead generation rate – TOFU
  • Lead qualification rate – Throughout the funnel
  • Conversion rate at each stage – Throughout the funnel
  • Customer acquisition cost (CAC) – BOFU
  • Customer lifetime value (CLTV) – BOFU

Step 8: Analyze, Optimize, and Iterate

Building a Sales Funnel is an ongoing process. It’s never a “build once, use forever” activity.

It is dynamic because you continuously analyze newer data to identify bottlenecks, underperforming stages and improve conversion rates.

Experiment with different content, tactics, and messaging, and iterate based on the results. A study by Aberdeen Group found that companies that regularly optimize their sales process experience 54% greater year-over-year revenue growth.

Step 9: Integrate with Your CRM

It is rarely feasible for anybody to monitor their Sales Funnel on their own.
As you scale up, consider a Customer Relationship Management Tool (CRM) to manage leads, organize contacts, visualize data and consequently areas of improvement.
A CRM is a trustworthy companion that helps you gain valuable insights into your sales process.

Conclusion:
Sustainable Growth from a Sales Funnel?

A Sales Funnel helps you maintain sustainable growth by helping you understand your customer’s mindset at each stage, providing them with the right set of information at the right time through valuable content and continuously optimizing your marketing efforts based on data and insights.

While it might look like a lot of legwork initially, the long-term benefits of a consistent lead generating machine and converting them into loyal customers are invaluable.

FAQ:

1: What's the biggest difference between a sales funnel and a customer journey?

A sales funnel is business-centric, customer journey is customer-centric. The former is a process of understanding a path towards sales. The latter is a map of customers’ thought process into making a purchase.

2: How long does it take to build a sales funnel?

It depends. Typically, a robust, fully automated funnel with extensive content can take months. The most important thing is to get a simple version up and running, then continuously test and improve it. The process is iterative as there is always a scope to optimize.

3. Can a sales funnel work for a service-based business, or is it just for products?

A sales funnel is crucial for service-based businesses. The principles are the same, but the content and stages might be slightly different. For example, a “product demo” might be replaced with a “free consultation” or a “strategy session.” The goal remains the same: to educate, build trust, and guide the prospect toward a sale.

4. Do I need expensive software to build a sales funnel?

Depends on the scale at which you are operating. While tools like HubSpot, ActiveCampaign, or Salesforce can automate much of the process, start with simpler, more affordable tools. Use built-in website forms, basic email marketing tools like Mailchimp, and free analytics tools like Google Analytics. Focus on strategy, not software.

5. What's the biggest mistake people make when building a sales funnel?

The biggest mistake is focusing only on the “deal closure.” Many people create funnels that push a product without providing value at the awareness or consideration stages. A sales funnel needs to be helpful at every step. The goal is to earn your prospects’ trust before you can ask for a sale.

6. How do I know if my sales funnel is working?

Track key metrics. If the website traffic is increasing, lead generation rate is healthy, and conversion rates are improving at each stage, your funnel is likely working well.
The ultimate sign of a successful funnel is a predictable flow of new customers and consistent revenue growth.

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