Editor's note: This post was originally written in 2016 and, while the best practices remain as relevant as ever, the article has been updated several times since to include even more insight into sales funnels and how they work within your small business' marketing mix. Dig in!
Does the thought of creating a sales funnel seem overwhelming? Do you know how to create one from start to finish?
While sales funnels are the backbone of any digital marketing campaign, we know they sometimes seem messy and complicated. But we have good news: creating a sales funnel doesn’t have to be painful and time-consuming. In this post, we’ll teach you how to build your own sales funnel by following just three fundamental steps.
But first, let’s quickly brush up on our terms.
What is a sales funnel?
A sales funnel is the journey customers take from the moment they first encounter your business to the moment they finally make a purchase.
The “funnel” metaphor refers to the fact that you start off with a wide audience that gradually decreases in size. Those who aren’t interested get filtered out along the way until you’re eventually left with highly qualified, ready-to-buy customers.
What are the stages of a sales funnel?
As prospects make their way through the sales funnel, they pass through four distinct stages:
At the top of the funnel (ToFu), prospects first become aware of your business and the solutions you provide. Perhaps they’ve stumbled across your blog or heard a colleague talk about you. Or maybe they’ve clicked through to your website after an ad came up in their Facebook feed.
Occasionally, prospects at this stage will be ready to buy from you immediately because you happen to offer something they want right now. But most of the time, they’ll need a little more nurturing before becoming customers.
Prospects who move to the middle of the funnel (MoFu) have a particular problem or a goal they want to achieve and are now searching for the right solution. Since this is largely a research phase, prospects are actively seeking information and educational resources that can help them figure out what their options are and how those options compare. For this reason, they won’t be very receptive to promotional content or sales pitches… yet.
Prospects who move to the bottom of the funnel (BoFu) have completed most of their research, whittled down their options to two or three candidates, and are on the verge of pulling out their bank cards. At this stage, a special promotional offer or a final piece of confidence-inducing content may be enough to sway the prospect to commit to your option over a competitor’s.
Prospects finally become customers at the very bottom of the funnel. If you’ve laid the groundwork properly then a strong call to action should be enough to get the sale once your prospects reach this stage.
The importance of understanding your sales funnel
Mapping out your sales funnel lets you understand what your prospects are thinking and doing at different stages of the customer journey. Armed with this knowledge, you can begin to tailor your messaging and offers to different segments of your audience, according to where in the funnel they currently sit. The more your communications resonate with prospects, the easier it is to nudge them closer towards a purchase.
Understanding your sales funnel also lets you identify any obstacles in your customer journey where prospects tend to fall off or stall. Knowing where and why this happens is the first step to fixing the leak and converting more leads into customers.
Your sales funnel can also help you make better sales forecasts. By keeping tabs on how many prospects are in your pipeline and what the average conversion rate is for each stage, you can make a good estimate of how much revenue your current pool of prospects is likely to bring in.
In short, a well-designed sales funnel helps your business generate better leads and convert a higher percentage of them into paying customers.
With that in mind, let’s go over how to start building your own sales funnel.
The 3 steps to building a successful sales funnel
Ready to build your funnel? Great! Follow the steps below to build a funnel that works for your business.
Step 1: Attract
You can’t make any sales if no one knows who you are. So, the first step is all about putting your brand in front of your target market and getting them to visit your website (or brick-and-mortar store). This allows them to discover more about your products and services.
Target the right people
Since advertising costs both money and takes time, it’s imperative that you have a clear idea of who you’re targeting. Even if you’re already familiar with your typical customer profile, you should spend some time researching all you can about what makes them tick.
Ask yourself the following questions:
- What problems are they trying to solve?
- What motivates them?
- Where do they “hang out” online?
- What accounts do they tend to follow?
- What kind of content do they engage with?
The more you understand the behaviors and motivations of your target audience, the better you’ll be at creating content and designing offers they find attractive.
Drive traffic to your website
Once you understand who you’re targeting, the next task is to capture their attention and convince them to visit your website.
There are two main ways to do this. The first is to take the organic route and create content for your target audience that they can find via Google, YouTube, and social media. Your goal should be to create high-quality content that your audience finds valuable, and to optimize that content for whichever organic channel your audience will use to discover it.
For example, if you choose to create a blog as a way to attract traffic, ensure that the topics you choose are well-researched, well-written, and are of genuine interest to your target audience. What’s more, your blog should be optimized for search engines so your posts rank as highly as possible for their corresponding keywords.
Another way to drive traffic to your website is by paying for ads. If you choose this route, be sure to focus on the platforms that your target audience is most likely to use. For example, if you’re a B2B company, it might make sense to prioritize your ad spend on LinkedIn. But if you’re targeting fashion-loving 18 to 30 year-olds, maybe Instagram should be your focus.
Of course, you can create multiple sources of traffic from both organic and paid channels. Just make sure not to spread yourself too thin. Avoid being the jack of all trades and the master of none!
Want to see more landing page templates like this? Check out our template gallery.
Once you’ve found a reliable way to drive traffic to your website, the next step is to turn those visitors into leads and begin the process of moving them down your sales funnel.
The most effective way to capture leads is with a lead magnet—a high-value item you offer in exchange for the visitor’s email address. Common examples of lead magnets include ebooks, white papers, training videos, and free trials. By signing up for these offers, a lead automatically indicates that they’re more serious about the types of products or services you offer.
It goes without saying that your lead magnet should be something that would genuinely appeal to a potential customer. But it’s equally important to ensure that the process of signing up for a lead magnet is as easy and obvious as possible.
Creating a dedicated landing page is one of the most effective ways to drive sign-ups for your lead magnet. This is because a dedicated landing page lets you focus solely on convincing your visitors that the lead magnet is worth their while.
By doing away with navigation bars and links to other content, a dedicated landing page can yield conversion rates as high as 8% to 20%, compared to just 1% to 3% on a typical web page. You can get a taste of how easy it is to create beautiful, high-converting landing pages with Leadpages by checking out our landing page template gallery.
Another way to encourage visitors to sign up for a lead magnet is by using pop-ups (boxes that “pop up” while visitors are browsing on a web page) or alert bars (thin boxes that sit at the top or bottom of a web page). Both options can be configured to contain a description of your lead magnet as well as an opt-in form, and have the benefit of being usable on any page of your website.
Once you’ve captured a new lead’s email address, add them to your email list so you can continue to communicate with them directly going forward. This leads us to step two…
Step 2: Nurture
Once a visitor becomes a lead, they start moving from the “awareness” stage of the sales funnel through to the “interested” stage, and eventually to the “decision” stage. You’ll need to nurture your leads to facilitate this transition, which entails providing them with amazing content and targeted offers to help build their trust in you. In time, this should convince them that your business is the right choice for their needs.
The importance of lead nurturing is hard to overstate. Not only does it make your leads more likely to become customers, but it can also increase how much they spend by as much as 47% compared to non-nurtured leads.
Creating an email nurturing campaign is one of the best ways to achieve this. This method involves building a relationship with potential customers by sending them email newsletters with content you think they’ll find useful. To get the most out of a nurturing campaign, prioritize doing all you can to satisfy your leads’ informational needs, as opposed to being overly sales-focused.
The very best nurturing campaigns send targeted emails to different audience segments based on their particular level of interest and recent interactions with the business. For example, suppose your business offers coaching to help clients improve their public speaking. Lead A signs up to your email list having read an article on your blog titled “12 Public Speaking Tips for Beginners”. Five days later you send Lead A an email pointing them to a short video series on your website about how to overcome stage fright.
Meanwhile, Lead B joins your email list after downloading an ebook titled “Speaking at Conferences and Events: The Ultimate Guide for Business Leaders”. A week later you send Lead B an email with a special offer for a free consultation with a member of your coaching team.
A crucial part of nudging your leads closer towards a buying decision is to anticipate and resolve any objections or reservations they might have about your product or service. You can identify these objections by closely analyzing customer feedback, checking online reviews of your business and competitors, and asking your sales team what questions come up most often when they’re closing a sale.
Remember, the ultimate goal is to draw your leads further and further down the sales funnel. To do this, you need to demonstrate that you understand their particular needs and frame your product or service as the best solution for them.
Step 3: Convert
By this point, you’ve drawn traffic to your website, transformed interested visitors into leads, and nurtured those leads to the point where they’re almost ready to become your customer. The third and final step of your sales funnel is to get the deal over the line!
Depending on the kind of business you operate, an effective tool for persuading bottom-of-the-funnel leads to convert is to show them case studies or testimonials from your previous customers and clients. The social proof used for this content should reassure sales-ready prospects that your business will truly deliver on its promises.
For businesses that sell high-ticket (and therefore high-commitment) products or services, the best way to close a sale is often for a sales rep to reach out to the lead directly. Discretionary add-ons like additional coupons, extended free trials, or referral programs can also help sweeten your offer just enough to seal the deal.
Of course, once you’ve converted a lead into a new customer your work isn’t over. Customer retention is just as important to your business as customer acquisition. In fact, existing customers spend up to 31% more than new customers, not to mention that loyal customers end up becoming your greatest brand advocates. So it’s vitally important that you continue to communicate with your new customers and do all you can to provide the best possible customer experience.
Start building your sales funnels!
Want to see more landing page templates like this? Check out our template gallery.
Now it’s time to put all this theory into practice! Building a sales funnel is no cakewalk. Getting it right takes planning, patience, and an appetite to learn through plenty of trial and error. But if you follow the steps outlined above there’s no reason why you can’t build an awesome funnel that consistently generates sales.
Don’t forget, Leadpages helps small businesses like yours streamline the task of building sales funnels with our high-converting landing pages, pop-ups, and alert bars. Click here to start your 14-day free trial today!
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