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What is a sales funnel, and why is it essential to build an effective one?

So, you’ve got a great product and many potential customers, but you find yourself frustrated because people aren’t converting to paying customers.

Does this sound familiar? Are you one of those people?

What do most of them do then? 

They do what they know best – they create more courses and work on getting more people to their website. 

Now – when you’re starting with your content marketing, it’s (relatively) easy to 2x your traffic. But growth is more challenging once you’ve been going for a while. 

Increasing your traffic and creating more courses will bring results, but there’s another more significant lever you can pull. One that could allow you to 2x, 5x, or maybe even 10x your sales.

That lever is a sales funnel.

Read on for more information about:

  • The ins and outs of a customer sales funnel
  • How to build a bulletproof funnel for sales that worked like clockwork
  • How to analyze a sales funnel

What is a sales funnel system?

A sales funnel is everything you set up to convert visitors into leads, leads into sales, and sales into repeat sales. 

A good funnel takes your audience on a graceful and beautiful customer journey. 

People go from hearing about you to learning more and trusting you. They opt-in to join your email list and decide to buy something from you for the first time. They start buying more expensive courses, and finally, they become loyal, returning customers. 

When you visualize a marketing sales funnel, maybe you imagine a super organized funnel that looks something like this:

Sales funnel

But, in reality, most people’s funnels look something like this:

Leaking sales funnel

They’re leaking money left, right, and center. They’ve got so many holes you can’t believe it and are nowhere near as neat as the first picture. If you watched any of my webinars, you probably saw these two pictures; I love using them to explain imagination vs. reality. 

Creating that funnel isn’t easy, and I’m not pretending it is. But it is doable. It’s not some mystic art; it’s a practical thing that you can do, one step at a time. 

For now, I want you to know that if you don’t have at least a basic sales funnel, you’re missing out on a lot of your potential revenue.

You’re missing out on a huge opportunity to earn what you’re worth and sell your courses to many more people. 

Once you learn about the sales funnel stages and implement them, you will thank past you for this.

What is a sales funnel in digital marketing?

Every business has a variation of a sales prospecting funnel. For example, for brick-and-mortar businesses, the first stage of the sales process could be someone walking by your store. The moment that person walks into the store, they become a lead. Your sales team then has the opportunity to sell to them directly by offering exceptional customer service. 

In digital marketing, your website is your storefront. You want someone to go from seeing your business on Google or social media to browsing your website to entering their email address to making a purchase

The typical sales funnel steps turn people from leads to prospects to customers.

What are sales funnels


This image shows a simple sales funnel, but you should consider the actions you want to take to move someone to the next level at each of these three stages. 

An example could be: 

Someone sees your ad on social media and clicks through to your website. How can you target your lead generation content to the segment you target?

How can you keep your prospect interested in what you do? Perhaps you have a lead capture on your website where you ask for an email address in exchange for some free content. 

Your prospect may need a little nudge to become your customer. You and your sales teams can now directly market to that prospect via email. Perhaps this is in the form of a discount code or limited offer. Once they purchase from you, it’s crucial to think about how you will retain the customer.

The 4 funnel stages

When building your sales prospecting funnel, you need to consider the four stages of a customer journey. You want them to move from a lead to a customer, so think about how you will capture them at each point of their journey. 

An easy way to remember this sales funnel process is with the acronym AIDA

AIDA sales funnel

A successful sales funnel begins with awareness. Think about the needs of your potential customers. How are they feeling at each of the lead funnel stages, and how will you capture their interest? What strategies will your sales reps use to turn their interest in your business into a desire to purchase from you?

Knowing your target audience is essential to building an effective sales funnel. Understanding their thought process and what may drive them to buy from you is vital for creating a successful prospecting funnel.  

Why do you need a sales funnel?

So what does a funnel do? In short, it brings you revenue. 

These are the top reasons customer funnels are essential for your business: 

  • You won’t waste money on marketing and sales efforts that aren’t working 
  • You have visibility over the channels your customers come from
  • You can focus your sales and marketing efforts on the most effective activities 
  • You can work on retaining customers and getting them to refer you
  • You can easily monitor your ROI 

Let’s look at some sales funnel examples. When one of our clients, Seonaid, started working on her marketing and sales funnel, she managed to grow her revenue 8 times while doubling traffic.

Yes, eight times! That means she made 4x as much per website visitor. And that number is only going up. We believe she can make about 3x more from her current website traffic next year. I’ll keep you updated on Seonaid’s progress.

Another client of ours, Paintable, doubled their revenue while hardly increasing traffic at all.

That’s why you need sales funnels.

If you have great online courses, over 2,000 website visitors a month, and an email list of over 2,000 people, a good customer funnel will bring you results (which means more money).

How can you analyze a typical sales funnel?

After you saw the two images of a sales pipeline I showed at the beginning of this post, the question you probably have right now is:

If I have funnel #2, how do I make it look like funnel #1?

Which hole should I fix first?

In my opinion, the best answer is – the one that will bring you the most money. 

But how do you figure that out?

You look at numbers. First, you must know your numbers for each funnel stage. Then, you must know the benchmarks. When you compare those numbers, you will see what you need to optimize.

Are you A/B testing ads and landing pages? Look at the data on what’s performing best. 

You need to know where people are dropping out of your sales lead funnel. Are they dropping off at the top of the sales funnel or further down the sales cycle

The best way to do this is with some sales funnel reporting. Scrutinize the data to understand what is causing prospective customers to drop out of the funnel.  

The best decisions in marketing are data-driven. We believe in that so much we’ve put it into our company name. 

I’ve explained how to find the biggest hole in your funnel in this blog post.

If you want to see how much you could be making if you optimize your current funnel, use our Funnel Revenue Calculator.

The sales funnel explained

Now we’ve answered the question “What is a sales funnel?”, it’s time for you to take action. Random marketing efforts with no plan or strategy behind them aren’t going to help you grow your online business.

Even if it’s the most straightforward funnel, map out the journey you want a prospective customer to take with you. If you can visualize a customer’s process with you, it will be easier to optimize it. 

We are sales funnel experts and can help you create your marketing funnel. Have a chat with us by booking a call here.


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