What is a Sales Funnel (and How Do I Build One)?

Digital Marketing
Tyler Pigott
Tyler Pigott

You’ve probably heard the term “sales funnel” — it’s marketing jargon that describes the process that potential customers go through on their path to making a purchase. Every marketing and sales consulting system out there has its own version of the sales funnel, but they all share the same basic structure:


(image credit: Wikipedia Commons)

The sales funnel is a visualization of the buyer’s journey. It starts with all the people who are aware of your company. These people have seen a social media post about your company, encountered one of your ads, or heard about your products or services through a friend. But not all of these people will have an interest in what you’re selling. Those that do have an interest will further explore your company and what you have to offer. They’ll check out your case studies, read reviews, look at testimonials, and maybe do a demo or use a free trial. Not all of the people who express a desire for your products or services will have the resources or capability to purchase from you, however. Those that do make it to the final stage of the funnel as they take action to become customers.

At the top of the funnel, you have a lot of people with varying needs, interests, and desires. As people go through the process of exploring the possibility of purchasing from you, more and more drop off as the decision of whether or not to buy draws closer.

Why the Sales Funnel Visualization is Helpful

Visualizing the sales funnel in this way helps you stay focused on several important things:

1. Not everyone who expresses interest will convert to a customer.

Business owners and marketers sometimes forget that a lot of interest doesn’t mean a lot of customers. Many companies are basing their KPIs on vanity metrics like number of followers on social media or website traffic numbers. But people at the top of the funnel don’t pay the bills. Successful companies focus on all stages of the funnel.

2. You need a unified marketing and sales strategy that’s designed to convert as many people as possible from each stage of the funnel to the next.

Too often, company leadership separates marketing and sales roles. When the two function independently, leads who may have otherwise converted can slip through the cracks as they become more and more sales-ready. Crafting a holistic strategy that’s designed to get potential customers all the way from the top of the funnel to the bottom will ensure sales and marketing are working together toward a common goal.

To do this, think about the buyer’s journey from the perspective of your potential customers. What questions will they have at each stage of the funnel? What needs will they have in each stage? How can you answer their questions and provide the right content and communications at the right time?

3. You should devote more and more attention and resources to people as they move further down the funnel.

As potential customers move further down the funnel, they become more valuable — because the further down the funnel they get, the higher chance they have at making a purchase. Your team is busy, and they don’t always have time to get everything done on their to-do lists. But prioritizing bottom-of-the-funnel leads is essential if you want to grow your business (and not waste the money you spent moving those leads from the top of the funnel to the bottom!). Each of these leads has a high probability of converting if you give them enough attention. Be proactive. Have a salesperson reach out to answer questions without pressure, offer additional helpful resources, and let them know that guidance is available if and when they need it.

Build Your Custom Sales Funnel

Every company’s buyer’s journey will look different depending on the industry, the nature of the products and services, and the target audience. Consider each step of the journey that your customers go through, from the time they first become aware of your company to the time they make a purchase. Map out this journey and create a sales funnel visualization of your own base on your particular process.

Next, consider what potential customers will need from both marketing and sales standpoints at each step. Outline responsibilities and assign them to team members to ensure your sales funnel comes to life.

How to Optimize Your Sales Funnel

After you’ve analyzed the sales funnel based on your customers’ buyer’s journey and it’s been operating for a while, you can optimize it for better performance. Ask yourself the following:

  • Where are the bottlenecks?
  • Where are leads falling through the cracks as we fail to nurture consistently?
  • What specific actions typically result in a sale that the sales team should be looking for?

Think through each step to uncover what’s working and what’s not working or what could be improved.

Putting the effort in upfront to create your custom sales funnel and optimize it will result in a more consistent flow of new customers and new purchases. You’ll boost revenue and profit as you make the most of your marketing spending.

Want feedback on your sales funnel? Get in touch for a complimentary 30-minute strategy session!

what is a sales funnel