A good sales funnel is the heart of your business and slight improvements in it can result in exponential success in terms of sales. To make these improvements, you need to know each step of the funnel in detail. Today we’ll dive into the details of a sales funnel to see what exactly it is, and how it can improve your business strategy.

What is a Sales Funnel?

A sales funnel consists of all the steps a user takes before buying your product. For a regular store in your neighborhood, a sales funnel might involve people walking by, a specific percentage of people entering in, browsing through the store, picking up a product, heading to the checkout and paying for the product.

Each step in our above example represents a part of the funnel that you can work on. If you want more people to enter your shop, a catchy advertisement outside the store will help improve this part of the funnel. If you want people to pick more of the same type of product, offering bulk discounts will improve this part of the funnel. In this way, one can improve small details in the sales funnel to increase sales.

Online businesses work in the same way. However, people have a lot of options when shopping online, and hopping from one store to another takes only a single click. Therefore, knowing your sales funnel well, and optimizing it so people don’t drop out and complete the sale, is the single most important part of your business.

Let us now take a look into the stages that are part of a sales funnel.

How Does a Sales Funnel Work

Before we move on to the stages of a funnel, let’s get a few concepts straight. It is important to know these terms before we move on.

Prospect: Any visitor that visits your site is a prospect. Here, you can guide him anywhere you want, such as to a sign-up form.

Lead: As soon as the visitor signs up, he provides you his information. He has now become a lead.

Once you have turned a prospect into a lead, you can expect the visitor to come back to the website often, either through the newsletter you offer or through one-time offers you send him via Email, phone, or any other means.

The 4 Stages of a Sales Funnel:

We move now to the stages that make up a sales funnel. These are:

  • Awareness
  • Interest
  • Decision
  • Action

An easy way to remember these stages is with the help of the acronym: AIDA! Let’s dive into the details:


Awareness is all about attracting attention. This is where you show your customer an attractive Facebook post, or tell him about the success story of another person. This stage increases the prospect’s awareness of your business, what you offer, or how you might help the prospect achieve what you’ve promised in the advertisement.

The purpose of this stage is simple to increase awareness, you aren’t expecting an immediate return on investment in this stage.


This is the stage where you either build a customer’s interest or feed his interest through quality content. It is the stage where you show the customer that you are the authority on the subject, or that you sell the best products in the category he or she is looking for.

Just like the previous stage, you aren’t trying to make an immediate sale. The whole point here is to satisfy the customer’s quest for information, and through the quality of information, convince him that you are the best in the business.


This phase is where the customer makes his decision. By now he has probably already looked at the alternatives and has them bookmarked or shortlisted somewhere. Your job at this stage is to give him your best offer. Free shipping, free membership for a future discount, a bonus product with the purchase, etc. Whatever you have to offer to the customer to help him pull the trigger on the purchase, this is where you can do it.


In this stage of the sales funnel, the customer has purchased the product. That doesn’t mean your work has ended. You now have to work on retaining that customer so that one sale can turn into more sales in the future. Mostly, this stage comprises of you thanking the customer for the purchase, offering him free returns, asking for his feedback, and ensuring him your customer support is there for any questions he may have in the future.

A small example

Let’s say you own a business that sells beverages. You have done some research and found out that your potential customers are lurking on Facebook, in places such as university groups. You also know the demographic you want to target.

You run a Facebook ad and anyone who sees the ad and is interested clicks on it and arrives on your landing page. You now have prospects that you can work on.

On the landing page, you can ask these people to sign-up, luring them in with a discount, a one-time offer, or a free product. Once the visitor signs up, you have converted that prospect into a lead. Note how you are moving the customer from one phase of the funnel to another.

Once you have the visitor’s contact info, you can send him useful content related to your business; content that tells the visitor your product is good, and that you know the business well.

One day you offer that customer a special discount and viola! The customer uses that discount and makes the first purchase.

Now that the customer has made a purchase, you can move him to another funnel, designed specifically for your buyers. The process starts again…

This is how you used the 4 stages of the sales funnel:

  • Awareness: You started the Facebook ad and make people aware of your product.
  • Interest: This was the sign-up stage. You offered them something so that they turned into leads.
  • Decision: You sent them content that enabled them to decide on the quality of the beverages you offer.
  • Action: You offered them that one-time discount and they bought a crate!

Steps In Building a Sales Funnel

Analyze Audience Behavior: Find out what people do on your website, where they click, where they scroll, where they spend most of the time, etc.

Capture Attention: Make people notice your business. Use ads, quality content, or any other means that entice people to find out more about your business.

Set Up a Landing Page: Bring your audience to a landing page where you can control their expected behavior and show them what you’re selling.

Offer Content: Keep feeding your leads with quality content. Offer them periodic offers and discounts to make them buy.

Stay in Touch: Create a list of people who have already bought your product and offer them further incentives so that they buy again.

Optimizing the Sales Funnel

Having a sales funnel set up is only one part of the job. You should continually be striving to improve the funnel to increase its effectiveness. There is always room for improvement!

To start with, try running more than one Facebook ad. If you have 5-10 different types of ads running, you are more likely to target a variety of audiences. Some ads will work better than the others which will give you vital info about how your customers behave.

Implement A/B testing on your landing pages. This is a tiring procedure but it works and is a great way to find out which landing page works the best. Making slight changes to the structure or content of your landing page can bring in varying results. Go with the design that works the best.

A/B testing can also be implemented at the checkout phase. Does offering free shipping work better than offering an equivalent discount on the product? The answer to this question will tell you a lot about what price range people prefer for your product.

Also, look at the results of each stage of the funnel. By analyzing the result, you can single out the weakest stage on the funnel. Slight improvements to this stage can increase the effectiveness of the other stages manifold.

And don’t forget to track the retention rate of your customers. Do people come back after buying your product once? That would help you realize how popular your brand is.

To conclude, creating a sales funnel, testing it, and optimizing it can take a lot of time. However, the time spent on it is worth it and should bring in rewards for you and your business.

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