A Detailed Guide to Building the Perfect Sales Funnel

In this post, you'll learn how to build a sales funnel that works for your business and all of the details that go into building it.

Some businesses look at sales funnels and marketing funnels as two separate entities. I personally think of them as one funnel, so I’ll be using both terms to describe them.

When it comes to sales funnels, Marketing generates traffic at the top and middle of the funnel. As the prospects get closer to a purchase, they are then transferred to the Sales Team. To facilitate this, communication is kept open between Marketing and Sales, and the goals and priorities of each department are harmonious.

A sales funnel is a marketing system with the ideal steps needed to sell your services or products. A prospect either goes on to the next stage of the funnel because they want to know more about your product, or they leave because they’ve lost interest.

This sales process is commonly called a funnel because the prospect is moved through a series of marketing channels to build awareness, trust, and engagement that closes the gap between being a lead and becoming a customer.

Already know what a sales funnel is? Find out how to build a sales funnel and make it more effective!

Every sale of a service or product begins with a certain number of prospective customers and ends with a smaller number that actually purchases a service or product. The idea is that you capture as many leads as possible and then narrow these candidates down in each stage of the funnel.  

What type of candidates exists at each stage?

• People who become aware that your brand exists
• Those who decide to learn more about your organization and services
• Customers that purchase your product or service
• Satisfied customers who let others know about your product or service through word-of-mouth
• Customers who buy additional products or services from you instead of your competitors

Although the sales funnel can be a useful tool, it is important to remember that not all customers will go through every step of the process in order. Many qualified sales leads may skip over the first few steps.

Creating an effective sales funnel is like building a house—you start with a blueprint and a good foundation.

Setting Your Goals

Before developing your marketing funnel, you need to come up with a specific goal that you want to accomplish with it. This is your blueprint. Goals like “getting more sales” or “making more money” are too broad. You need to narrow your topic. A goal like “Increase sales by 15% over last year” or “Have 1000 new leads by March 15” is better.

A marketing funnel with a defined goal also allows you to refine prospective customers into segmented groups as well as interact with those customers that have already made a purchase and are satisfied with your product or service.

Keep in mind that your sales funnel goal should take into consideration how your business operates. There are no one-size-fits-all goals! Remember, these goals aren’t stagnant, they will change as your business grows.

Much too often, a business will try to turn a lead or prospect into a sale as quickly as possible, turning off a potential customer. Using a sales funnel helps you turn leads into customers through a series of small conversions.

Now for the Foundation

The foundation of any good marketing funnel is a good Customer Relationship Management (CRM) application with marketing automation capabilities. The function of any good CRM is to help automate and simplify different processes in the funnel. It also provides a platform to organize customer data as well as keep track of your sales and marketing data.

When you choose a CRM application, ensure it is flexible enough for your business needs. At a minimum, CRM software should be able to automate most of the process for you by tagging your prospects based on what they are interested in, which then could trigger an action of a specific marketing campaign. This process is also known as marketing automation.

I would suggest checking out PULSE, it’s a great option with many more features than just sales and marketing automation.

If you are a Franchisor, then Pulse has features specifically developed for franchise systems. This has all of the same robust features as PULSE and it also has many other features for franchise management.

An effective CRM is one of the best investments a business can make! A CRM application is a necessary supplement to a sales funnel because it allows you and your team to keep track of different customers and their specific requirements. The automation features of a CRM mean that you can easily set up a campaign to respond immediately to an interested prospect.

A good CRM should also be able to run reports on all your different marketing channels and the different stages in your sales funnel. This way you can figure out what is working and what needs to be tweaked.

The Building Blocks: The 5 Stages of a Sales Funnel

The sales funnel begins by capturing the attention of prospects and finding out which people are the best target for your product or service. The sales funnel continues to nurture buying customers, increasing customer satisfaction and offering loyal customers with special services or exclusive products. Although the structure can vary with the industry and need, a sales funnel usually consists of the following categories:

1. Making people aware of your business and what you can offer them (Unaware)
2. Finding those in your target market and educating them on your product or service (Lead)
3. Engaging with those who have expressed interest. (Prospect)
4. Converting prospects into purchasers. (Customers)
5. Developing fans who tell others about your business and continue to buy your products (Fans)

The Unaware Stage: Is Anyone Out There?

The Unaware stage is usually, but not always, the first step of a marketing funnel. During this phase, you’re simply trying to make potential customers aware of your brand.

Building awareness can be done in several different ways. Some techniques you might want to consider are:

• Content Marketing
• SEO (Search Engine Optimization)
• PPC (Pay-Per-Click) advertising
• Retargeting
• Social media and/or email marketing.
• Blogging
• PR—print ads, radio advertising, billboards, direct mail
• Attending events—conferences, seminars or presentations—related to your industry or product. (Don’t forget the business cards!)
• Joining and participating in relevant Facebook or LinkedIn groups

When using these techniques, you should focus on adding value, not just promoting your products or sharing links to your website.

During this stage, you can start refining your target customers while telling them about how they can benefit from your products or services. This beginning step should be constantly tested and tweaked to find out what works best for your organization.

Want to know a great way to make your outreach effective? Give people something free if they provide their email address or other contact information. A good email list is very important for your business's success, and you should always be thinking of ways to get emails from your potential customers.

You’ve got the word out and are getting noticed. Now it’s time to move on to the Lead.

The Lead Stage: Don’t Bury the Lead!

The terms “lead” and “prospect” often get confused. A lead is someone in your targeted group who may or may not have heard of your company and has not made effort to engage with your organization. A prospect is someone who already has a relationship with your organization. Prospects know who you are and have shown interest in your product or service.

At this stage, you are speaking directly to the people you think your organization can help. This is when you want to supply them with content that helps them evaluate both you and your services. It’s important for your leads to be able to access information that will help them differentiate you from everyone else.

Don’t try to rush things by pushing for a sale during the lead stage. The lead stage is about developing trust and educating people. You want them to know why you are an expert in this field and are the best choice to solve their problem.

This can be done by targeting them with information we know they are interested in. For example, if I'm a car dealership, it wouldn't make sense to target someone with Audi ads if they were looking at a BMW on my site. I should target them with the exact BMW they were interested in.

Maybe, to convert a lead into a prospect, they just need more information on this particular BMW model—what type of gas mileage it gets, what safety features are available, or customer reviews.

These are all steps that go into the sales funnel. If this person visited my site and was browsing a specific model of a BMW, then I can retarget them while they are on Google or Facebook with specific advertising for this BMW.

If they click on the advertisement, I can have a call to action on that page to submit their email to request a test drive. Once you have their email, now you have a prospect and can move them further down the sales funnel.

Want to learn more about retargeting your leads and customers with specific ads? Download this how-to guide I created on retargeting here

The Prospect Stage: Prospecting for Sales

A Prospect is further along the sales process than a lead. They have taken action—such as signing up for an email list or following you on social media—that shows they have an interest in what your organization offers.

A lesser percentage of Leads turn into Prospects, and those Prospects can be reduced even further into people who are actually qualified to buy. What do I mean by qualified? A Prospect may love your product but not be the decision maker in their organization or they might not have the money to complete a purchase.

People often get “stuck” in the Prospects part of the sales funnel. This is where relationship building comes in. A well-thought-out sales funnel can increase your conversion rates substantially. Interact directly with people on social media. Comment on blog posts and attend industry events. Offer education and help, not just product pitches. Prospects will want different content while moving through the sales funnel, so don’t send them the same type of emails you are sending your leads.

The Customer Stage: Customer Satisfaction

Congratulations! Your prospect has turned into a customer. This is where everyone who has a service to offer or a product to sell would like to be, but only a limited number of people who are interested in that service or product will become a customer.

Repeatedly give customers reminders and the opportunity to purchase your service or products. Email them with information about your newest products or sales specials. Remind customers of upcoming holidays or important dates related to your product or services.

At this stage, it’s a good time to introduce upsells to your products or service. Create an offer—an extended warranty or a discount on their next purchase—that will deliver even more benefits to your customer if they upgrade. This strategy is known as an upsell.

Don’t abandon your customer just because they have purchased something! Remember that it is always easier to retain a current customer than trying to attract a new one.

At this point, you need to focus on retention—turning a one-time buyer into a repeat customer and, better yet, a Fan.

The Fan Stage: I’m Your Biggest Fan!

Many businesses think that once the person has purchased their product or service, they can now return to hunting for more leads. Don’t make this mistake! Don’t think that the sales process is finished because your service or product has been purchased. Once you have these types of customers, work to keep them.

If I was forced to choose between new leads or Fans, I already have—current customers would win every time. Why? Customers who receive personal attention and easy access to product support will feel that they made the right choice. Your existing customers have already purchased from you, they trust you, and they are a reliable source of revenue.

Even if they don’t purchase anything from you again, Fans will recommend you to business associates, friends, family, and others. These people are your evangelists, they are the ones that leave glowing reviews about your organization and the services or products you offer.

Sometimes even your fans need a little nudge. Encourage existing customers by giving them a discount on their next purchase if they refer someone who becomes a customer. Resell existing customers the latest version of a product they have already purchased.

Part of your sales funnel in this stage should be a comprehensive referral program that encourages your existing customers to refer others to your business.

This group is important because they can affect the structure of your sales funnel. Survey these customers and get their feedback. Once you have enough information—usually 1000 or more responses—find common trends and tweak your sales funnel accordingly.