Understanding Sales Funnel

Definition and Purpose

What is a sales funnel?

A sales funnel is a simplified version of what your clients are already doing. They are finding you through search, social media, or word of mouth and then have to learn about your services, products, and offers. Instead of waiting for them to do all the research for them, a sales funnel curates the right offer and presents it to your ideal client so they can just say yes or no. A sales funnel is an automated and 24/7 sales person that knows exactly what your ideal client wants and walks them through the sale.

What is meant by a sales funnel?

“Sales Funnel” is a term used to describe the multiple steps that can be implemented online or offline in helping your client understand who you are, what you do and how they can work with you or purchase your services/ products. Oftentimes this gets confused for the marketing funnel which we will talk about in the “What is the difference between a marketing funnel and a sales funnel?” section of this article.

What is another name for a sales funnel?

Sales funnels have also gone by the name “revenue funnel” or “sales process”. Although this is seen as corporate lingo, I think it confuses the meaning. The sales funnel is used to move potential clients through a predetermined and tested journey to increase conversion rates over time.

What is a funnel used for?

You can use a sales funnel for any product, service, or offer that you have for your business. My first funnels were all around sales and promotions however I didn’t understand their true power at the time. If you really want to have a successful sales funnel it should be for your main offer, product, or service. Craft it once and then increase the conversion rate over time by tweaking a few key factors like the headline, messaging, and call to actions. You can use a sales funnel for everything from books, courses, training, boarding, grooming, digital products, and physical products.

1. E-commerce Products

   • Clothing and apparel

   • Electronics and gadgets

   • Home goods and appliances

   • Beauty and skincare products

   • Fitness equipment and accessories

2. Digital Products

   • E-books and online courses

   • Software applications and tools

   • Digital artwork and design assets

   • Subscription services (e.g., streaming platforms, membership sites)

   • Templates and resources for various industries (e.g., website templates, resume templates)

3. Services

   • Consulting services (e.g., business consulting, financial advisory)

   • Coaching and mentoring services (e.g., life coaching, career coaching)

   • Freelance services (e.g., graphic design, copywriting)

   • Event planning and coordination services

   • Health and wellness services (e.g., personal training, nutrition coaching)

4. Information Products

   • Online workshops and webinars

   • Digital downloads (e.g., guides, templates, worksheets)

   • Educational content subscriptions (e.g., online learning platforms, educational memberships)

   • Virtual events and conferences

5. Physical Products with Subscriptions or Memberships

   • Subscription boxes (e.g., meal kits, beauty boxes)

   • Membership clubs and exclusive communities

   • Product bundles and packages with recurring deliveries

   • Continuity programs offering ongoing support or resources

Examples and Effectiveness

Is a sales funnel worth it?

A sales funnel is 100% worth it whether you are just starting out or trying to scale your already successful business. The more you can automate your business, the more you can focus on marketing, and delivering your services. How a funnel works is perfect for you to send all your traffic too and then work with them after they have gone through the funnel. With the right funnel you can eliminate your sales team or reduce how much time you spend selling in person. You can also put out better content since you are not worried about the back end of the business. It is all handled by your sales funnel. You “sales funnel” is doing more work in your business, not you!

Do sales funnels really work?

An article from Persuasion Nation stated that 96% of website visitors are not ready to buy and need nurturing through the sales funnel. And there could not be a better example of how powerful sales funnels are. They do the nurturing for you without human error or making mistakes, failing to follow up, or saying the wrong thing to the wrong client. Your sales funnel can be improved time and time again through split testing

What is an example of a sales funnel?

Think about the last time you went to purchase something expensive. Maybe it was furniture, a car, or even a house. The sales-person was responsible for reaching back out to you, working with you, and eventually finding exactly what you were looking for. If they couldn’t find what you were looking for, they had other options to show you and the process starts over again. Now that experience and streamline it into a digital format. Your potential client goes looking for your service online. Your link and landing page helps them understand what the offer is and how it will benefit them. If they think that this is right for them and it will solve the problem they are trying to solve then they will move forward in the sales funnel.

What does a good sales funnel look like?

Sales funnels come in many shapes and sizes. The best funnels do exactly what they are supposed to without being too overwhelming. This also depends on your audience. If your funnel is confusing for your ideal audience then that is going to cause them to leave your sales funnel since a confused mind never buys. Here are some examples of good funnels that convert at a higher than normal average and you can model your own funnels after.

What makes a good sales funnel?

A good sales funnel is determined by two main factors; it’s conversion rate, and ease to operate. You could have the highest converting sales funnel in the world, but if it is too complicated to work with, you will rarely send anyone there for business. Instead you should aim to send everyone to your sales funnel and make it easier for you to run your business. If not then you are just making more work for yourself.

Sales Funnel Strategies and Techniques

Implementation and Creation

How do you start a funnel?

A sales funnel is as simple as picking a funnel building software and playing around with it. Of course you can test out your sales funnel offline but the effectiveness really comes when you have it down online and it works for you around the clock. Start with where your ideal client is and try to get them into your sales funnel through content marketing, social media marketing, collaborations with other businesses, and paid advertisements. If you want to learn more about sales funnels and how to use them in your business you can watch this training.

What are the key elements of a sales funnel?

The key elements for your sales funnel should include at a minimum; your sales page, order confirmation page and thank you page. You can of course go above and beyond with this, adding in additional offer pages that will increase the average order value. Instead of one offer at $100 you can upsell them after their initial purchase with another offer at $297. This will increase your average order value and profit in the long run. This would take the key elements of your sales funnel from a sales page and confirmation page to; sales page, one time upsell page, confirmation page, thank you page.

Optimization and Customization

How much does a sales funnel cost?

To run and operate a sales funnel will only cost you what it does to keep the software running smoothly. Once the sales funnel is up and operational, besides maintenance, your costs should only come from driving traffic to the sales funnel. This can be in the form or time by making content or paid ads to drive traffic to the new funnel.

How much does it cost to set up a sales funnel?

A sales funnel itself costs you nothing However there are costs associated with the sales funnel that you have to take into consideration. First would be the software for hosting the funnel which can range wildly from $10 to easily over $1,000 a month depending on your needs. You also have to consider additional costs such as copywriting and graphics if you plan to outsource them or do it yourself. A good copywriter and graphic designer will cost anywhere from $2,000 to $15,000 or more depending on the project.

How do you build a strong sales funnel?

A strong sales funnel can only be built over a long period of time. Start off by making sure that your offer, service, or product is the best that it can be. Even a great sales funnel will not work if the offer is no good. Once you have tested that your offer is great, the next steps are to split test headlines, graphics, and formatting of your funnel. A strong sales funnel is clear and concise with it’s marketing message, has a strong call to action, and aims to provide the most value to the customer without wasting their time on irrelevant details. Whenever possible simplify your sales funnel to highlight the benefits to your ideal customer and give them a clear call to action.

How do you customize a sales funnel to fit your business?

Sales funnels by nature are 100% Customizable. The only problem is that they are so flexible it can seem difficult to get started. The best way to know what will work with your business is to look at the competition and study what they are doing that is working and see if you can make it better. If they are using webinars to sell their services, products and offers, you can use webinar sales funnels as well. However, you can also try a different type of sales funnel and test against the webinar funnel to see if you can beat their sales funnel model. Trial and error are the fastest ways to learn what will work with your business so get started now so in 90 days you have more information to work with.

Comparisons and Variations

Is a sales funnel a CRM?

No, a sales funnel is not a CRM. Although CRM software has a few features that can help you manage your sales funnel, your sales funnel should be able to be run almost 100% automatically. Outside of sales calls or additional demos for high-ticket or specialized offers your sales funnel should do all the work for you. The CRM software might have a “sales-pipeline” or “sales-process” section that will outline the journey your client goes through to become a customer. This is where the confusion stems from. You can use the CRM software to start understanding how your sales funnel is taking your potential customer through the sales process but don’t rely on the CRM as your sales funnel.

What is the difference between a marketing funnel and a sales funnel?

The simple distinction is that a sales funnel aims to sell a particular product, service, or offer within the funnel steps as where the marketing funnel is trying to bring potential customers into the business, increase awareness of their services, products, and offers and guide them toward a sales funnel. Think of the two funnels as different systems that bring your potential client either toward the sale (marketing funnel) or through the sale (sales funnel)

Sales Funnel Application and Success

Beginner's Guide and Fundamentals

Do you need a sales funnel in 2024?

You need a sales funnel in 2024 like your life depends on it. If you are still using just a website then you are telling your audience that they are worthless and you don’t value their time. Who wants to be searching around on a website trying to look for their solution. You are trying to compete with everything that is going on in their world. Your company is not one of the big giants that can waste time and money getting clients. If you are serious about business in 2024 then you need to be using sales funnels to make it easier for your potential clients to know who you are, what you do, and how they can work with your services, products, and offers. Hands down!

What are the basics of setting up a sales funnel?

The first thing you need to do is have an amazing offer that will knock the socks off your potential customers. Then purchase software to build out a sales funnel. Craft a landing page that focuses on the emotion of selling your offer first and then throughout the landing page, tackle all objections and questions they may have using logic. If they are reading your whole landing page, it’s because they are looking for a reason to say yes or no. Then you need an order form and payment processor to complete the transaction. The last thing in order to set up a basic sales funnel is an order confirmation and thank you page with next steps (any additional information they need to know like time till delivery, scheduling a call, support, etc.)

1. Amazing offer to knock customers socks off

2. Software that makes it easy to build and measure your sales funnel

3. Landing Page with emotion and logically selling

4. Payment processor and order forms

5. Thank you page with order confirmation and next steps

Profitability and Success Metrics

Are “sales funnels" profitable?

Yes, sales funnels are very profitable when used correctly. Unfortunately many will not fully understand the benefits and use cases before implementing a sales funnel strategy and therefore believe they do not work. In order for a sales funnel to be profitable, the cost per acquisition of a customer and the profit margin must be understood before launching the sales funnel. If it costs you too much to acquire a customer then the sales funnel will either break even (meaning you made the same amount that you spent in order to get a customer) or it will be negative (you spent more to acquire a customer than you made from that customer). By understanding first what you can spend to acquire a customer realistically, you can then price your offer accordingly to insure your sales funnel is profitable. The best software to ensure your sales funnel will be profitable is GERU and I use it daily to test new funnel ideas and ads strategies

What makes a good sales funnel profitable?

A sales funnel can only be profitable when the cost to acquire a customer is lower than that of the average order value. This can be done in two ways, by lowering the cost to acquire a customer or increase the average order value. By decreasing the cost to acquire a customer (only using free organic marketing, or getting really cheap ads) you can make a higher profit margin on each order of your service, product, or offer. By increasing the average order value (by using one time upsells and order bumps) you can keep spending more to acquire a customer because you know you will make more on the back end of the sale. This is trickier for novice sales funnel builders but when done right can pay huge dividends.

What metrics should you track to measure sales funnel success?

The two main metrics you should be tracking when you first start your sales funnel is traffic to the funnel and the conversion rate through the funnel. Others include the load time of your funnel and split testing, however they are more advanced and should be reserved for later on in improving your funnel. Without a lot of traffic to your landing page, you won’t know how good or bad it is. Your first goal should be to get 1,000 people to the funnel as fast as possible. You can do this through paid ads which is the fastest, yet more expensive way. You can also use content and social media marketing to get your already existing audience to test out your funnel for you. Once you have a large enough pool to pull metrics from you should be looking at the conversion rate. Now that you can think less about getting your audience to your funnel you should focus heavily on improving how many people become customers after landing on your sales funnel. You should aim to improve week over week and month over month however the national average is somewhere between 3.1% – 5% is a good conversion rate

Thank you for reading!

If you have made this far I want to thank you for reading and learning with us. We are on a mission to provide the best information on sales, marketing and operations for business owners and we could use your help. Let us know what you learned, what you would like to learn, and how we can improve our future content with this survey down below. Thank you!