Sales Funnel: What You Need to Know

When we hear the term sales funnel, the first thing that comes to mind is revenue. And while that’s not necessarily wrong, people often forget that a sales funnel refers to the customer’s buying journey. Your focus is to generate leads and nurture them so that after a purchase is complete, you can establish a lasting relationship with them.

A lot of effort goes into building an effective sales funnel, and businesses that know how to use them are the ones that experience growth and success. If you’re looking to elevate your sales funnel, you came to the right place. This article will discuss the importance of sales funnels and five powerful examples to grow your business and get people interested in your brand.

What is a sales funnel?

A sales funnel is a crucial component of a brand’s marketing strategy that paints a clear picture of how a lead gets converted into a customer. It’s so-called because the sales process starts at the top of the funnel, where you introduce prospects to your brand, and down to the end of the funnel, where you retain them as your customers.

sales funnel stages
The five stages of a sales funnel are awareness, interest, decision, action, and loyalty.

To give you a better idea of what a sales funnel is, let’s break it down into five separate stages:

1. The awareness stage

At the top of the sales funnel is the awareness stage. In this stage, prospects encounter your brand for the first time through advertising, word of mouth, or social media. The goal is to introduce your brand and encourage those leads to move down the sales funnel. To achieve this, you’ll need to appeal to your prospects based on their needs/interests.

2. The interest stage

The next stage on the sales funnel is the interest stage. Here, you’ve captured the attention of your leads, and they’ve shown interest through filling out a form or signing up for a free trial. At this stage, the prospect is likely conducting research to learn more about your brand and its offerings. They may also be doing some product research and browsing your websites to see what your brand is about.

3. The decision stage

The decision stage is where the prospect contemplates whether or not to buy your products or avail of your services. They’re looking deeper into your pricing and determining whether your offerings fit their needs/interests. At this point, the prospect could either move down the sales funnel or exit it completely.

4. The action stage

Further down the sales funnel is the action stage, where you’re ready to seal the deal with your prospect and convert them into a customer. A powerful call-to-action (CTA) is the key to closing the deal and convincing the prospect that your product/services are worth their hard-earned money.

5. The loyalty stage

Congratulations! The prospect has exited the funnel, and you’ve completed a sale. But that doesn’t mean that it’s the end of the line. You’ll need to nurture your customers and re-engage to convert them into loyal customers. Loyal customers benefit brands in more ways than one, and by fostering loyalty with your prospects, you can secure repeat sales and sustain the growth of your business.

How prospects move down the sales funnel will depend on factors like your marketing effectiveness and your brand’s public perception. Ideally, you want to focus on the prospects that arrive at the middle stages of your sales funnel because they are the ones that display a strong interest in your brand.

What are some examples of a sales funnel?

To understand how a sales funnel works, let’s look at two examples from Hulu and ConvertKit.

1. Hulu

Hulu is a popular online streaming service that implements its sales funnel in the form of a free trial. Subscribers can test out their streaming services for one month and get automatically charged if they continue with their subscription.

hulu sales funnel

Hulu’s sales funnel is pretty straightforward. Subscribers enter the top of the funnel through advertising or social media and arrive at a landing page where they see a CTA button that offers a one-month free trial (except the Hulu + Live TV).

After that, prospects can choose a plan that fits their needs and budget. The sales funnel is perfect for subscription-based companies that can afford to provide free trials to their subscribers. Once the free trial ends, subscribers can choose to continue with the subscription, giving Hulu a reliable monthly income stream.

2. ConvertKit

ConvertKit is an email marketing tool that enables brands to reach their target audience and boost brand awareness. Their sales funnel is different from Hulu in that they use a webinar funnel to attract prospects and convert them. The webinar functions as a lead generator where people can register for their webinars and turn them into leads.

convertkit sales funnel

The second step of the funnel is where ConvertKit collects important details of their leads like the email address and contact information. The third step of the funnel is providing instructions for getting your leads to attend the webinar. Once they attend the webinar, the final step of the funnel is to have the attendees purchase your products, thus completing the stages of the sales funnel.

Steps on creating an effective sales funnel

Creating a sales funnel might feel intimidating initially, but rest assured, it’s less complicated than you think. Here are five easy steps that you can follow to create a sales funnel that’s in line with your brand’s products/services.

Step 1: Understand your target audience

When creating a sales funnel, the first thing you need to do is to analyze your audience’s behavior. Remember, your brand caters to a specific audience interested in what you have to offer. Know what makes them tick, what solutions they’re looking for, and what social media channels they use.

The more information you can gather from your target audience, the more optimized your sales funnel will be. The most important thing is to gauge their interest level in your products. You can do this by creating a survey or by sending marketing emails.

Step 2: Picture your ideal buyer persona

A buyer persona is a detailed description of your ideal customer. Every brand has an ideal customer in mind who has a want and need for their products/services. To craft this persona, you’ll need to ask yourself a few questions such as:

  • Why should people buy your product?
  • What influences a person to buy your product?
  • How will a person use your product after buying it?

Aside from answering these questions, you’ll need to conduct thorough research on your target audience’s age, location, buying habits, and more. You’ll likely come up with various buyer personas, and that’s okay. What matters is that you can get a good idea of your ideal customer.

Step 3: Ramp up your marketing efforts

To be able to sell your products, you need to reach your target audience. When building a sales funnel, marketing should be one of your top priorities, as you’ll need to generate traffic to get people to reach the top of the funnel. You can generate traffic to your website in many different ways, like:

  • Content marketing
  • Search engine optimization
  • PPC advertising
  • Social media marketing
  • Email marketing
  • Word of mouth

Having a combination of paid and organic traffic is a great way to generate leads and get prospects to enter your sales funnel. Make sure to optimize each of your marketing campaigns to get the most out of your marketing dollars.

Step 4: Engage with your target audience

So you’ve acquired enough leads and generated traffic to your website. What’s next? You need to engage with them and teach them more about your products/services. There are plenty of ways to achieve this, and you can start with creating high-quality content.

We always say content is king, and this remains true with creating an effective sales funnel. Write relevant blog posts that bring value to your site visitors. Create videos that demonstrate the effectiveness of your product/service. Promote your content on social media pages and interact with your followers. When you engage with your customers, you keep them hooked to your brand and make the conversion process easier.

Step 5: Converting your leads

A high-converting sales funnel is one that ends the buyer’s journey with a simplified purchase. According to Harvard Business Review, brands that use a simplified checkout process are 62% more likely to secure a high-value sale. Keep this in mind when creating a sales funnel to increase your chances of converting your leads.

Limiting the number of forms and having one-click options for sign-in are two ways to boost your conversion rates. Lead conversion doesn’t have to be too complex; otherwise, you’ll risk losing a sale and have prospects exit your funnel.


A sales funnel is more than just a tool for generating sales. It’s a roadmap that details the customer’s buying journey from start to finish. Knowing what a sales funnel is can help you improve your conversion rates and get your target audience interested in your brand. Hopefully, this article covers the basics of sales funnels and enables you to create one that’s effective and high-converting.

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