Smiling salesman shaking a customer hand at new car showroom to show concept of "sales funnel"
Italia Martinez Vallejo
By: imartinezvallejo
Read in 16 minutes

How to Create a Sales Funnel for Your Business

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You might think that a sales funnel is a framework that can only be used by big companies that earn a lot of money. Actually, the sales funnel can be applied to any business. So it most likely can be applied to your situation and can help your small business breakthrough.

But what’s a sale funnel anyway? As it’s stated in its name, a sales funnel can be visualized as a funnel in which your potential customers go through and pass several stages until they finally purchase your service or product. Each stage of the funnel can vary depending on your type of business, and target market. However, it’s usually divided into these phases or stages: Awareness, Interest, Decision, and Action. Now, let me explain to you all of them.

Phases in a Sales Funnel

Awareness

It’s the first and most important stage. It’s when your prospect customer hears about your business for the first time. If you manage to hit your target audience, you will be able to make the prospects aware of a problem or need they have and you can get their attention. The prospect could hear from you from your various promotion channels: a flyer, Facebook, a newspaper ad, a poster or even from another friend.

Interest

Once your prospect is aware of your product, he/she starts to show interest in your business and starts researching about it. It can be done online by looking at your website or reading reviews about your product or service, or it can also be offline by asking references through friends or even reviewing a physical catalog.

Decision

Your prospect already made the research about your business and now it’s in the decision phase, where he/she is taking the final decision of whether you’re offering is a solution to his/her problem or need.

Action

At this stage of the sales funnel, the prospect finally becomes your customer and decides to buy your service or product. But this is not where it all ends: you still need to get this customer to come back by building a relationship with he/she. You could keep being their solution to their need for a longer time.

So, now that you know the stages of a sales funnel, let’s start by building your own.

 

How do you create a sales funnel?

Awareness stage

Know your buyer persona Before starting any promotion, you should be very clear on who are you talking to, which kind of person do you want to attract, which needs do they have and how your product or service is going to solve it for them. There are a lot of templates online that can help you in creating your buyer persona by asking the right questions.

Create a website This is a must if you’re running an online business. However, nowadays it’s also really useful if you run an offline business. A website allows you to show all the information about your business. Your history, your team, your products/services, your contact information, a gallery with pictures of your business, etc. And you can also connect your website to your social media accounts.

Building a website can look like a scary task, but you can always hire someone with experience to help you. We invite you to take a look here at some tips and tricks to create your own website.

Online and Offline Advertisement This is the first thing your prospects will see of you. Here is where they become aware of your existence and when they start considering that you could be a solution to their problem.

For online advertisement, you can use Facebook Ads, Instagram, Twitter, Snapchat, Google Ads, etc. Building your buyer persona first will help you decide which channel to use to reach your customers and what type of content to use.

Offline advertisement can happen through traditional ways of promoting your business: billboards, events, flyers, posters, radio, tv spots, etc.

Interest stage

At this point, your prospect has visited your website or store. They may have even subscribed to your newsletter to receive news or content from your company. In this stage of the sales funnel, you can start to incentivize your prospect. You got their interest, so now it’s time to take action. You can schedule an appointment to demo your product to the potential buyer. If your products or services don’t need to be demo’d, you can still set up an introduction meeting to better understand the clients needs and to see if you can offer them a valuable solution.

Publish content showcasing your expertise – Having a content plan for your blog is very useful to get started. You can share experiences of previous customers, how your product or service has changed lives or just any written content that could be relatable to your target audience.

Emails – If you got your prospect’s email, you can start creating your own email list and sending newsletters once or twice a week with new updates about your products, or even promotions, especially for those that just registered to your list. This would give your prospect a little push to finally make the decision and purchase your offer.

Free trial – It could be a free trial of your product or service, a smaller product in exchange for a purchase, or just a small gift. There are countless ideas to do this, and if there’s something people love more than discounts, it’s free things.

Decision stage

And now, your prospect is thinking more seriously about buying from you and enters the next stage of the sales funnel: decision. You can start helping them with that decision through:

The sales rep(s) needed to follow-up – At this stage, your sales team needs to prove they are worth it. A good salesperson should have gathered enough information from the first meeting to understand your prospects’ needs and their concerns about the product. With this information, they can follow-up with responses that position your product as the solution to the prospect’s problem.

Offer a discount – It could be a 10% off their first purchase, or you could also offer a product or service half-priced. Everyone loves to get a discount!

There are plenty of ideas that you could use at this stage, the point is that once you get the people’s attention, you need to work hard to up sell them to purchase.

Action stage

Now, your prospect has made a decision and he/she is ready to buy from you, so the next step comes naturally:

Close the sale and onboard the customer – Your prospect has made the decision of buying from you, so make sure everything is ready for that. If you’re selling something online, you should always make sure that your payment gateway is working properly or that you have your customer support ready to assist if there’s an issue. If you’re selling at your shop, it should be easier, but you should also make sure that everything is working properly.

Ask for a review – Once your prospect became your customer and started buying from you and using your products, ask them to leave you a review in your social media, or maybe take their testimonial and use it as social proof that your business is legit and your service or product is valuable. This could convince other prospects when they’re at the decision stage.

Make them come back – Create a relationship with your customers. Keep sending them updates about your business on email, invite them to events or promotions that you run afterward. You can also ask them for their opinion on a new product/service you’re developing. They will like to know that you care about them and their point of view is taken into consideration.

How to identify leakage in your sales funnel?

The truth is that it is impossible to make all the people you prospect to go through each stage of the sales funnel and buy from you at the end, but you can detect on which point you’re losing more people depending on your conversion rate.

Let me explain it this with a basic example of a sale offline:

Imagine that you own a second-hand car shop and you throw an event for people to see what cars are available, and you get 100 attendees (awareness). 10 people leave their phone number on a form (interest). Later that week you call these 10 prospects to invite them to try out one of the cars, but only 6 of them come (decision) and at the end, only 2 of them are convinced and ready to buy a car (action). So your conversion rates would look a bit like this:

Attendees (Awareness) – 100

Prospects (Interest) –  10 – 10%

Car trial participants (Decision) – 6 – 60%

Buyers (Action) – 2 – 33%

In order to improve your amount of sales, you need to improve the other steps on the funnel. In this example, we can see that the prospects are leaking the most from the awareness to the interest stage. There could be several reasons for this, depending on the strategy for your event. Maybe you didn’t attract the correct people, maybe your sales team people on the event didn’t manage to convince people, maybe people only came for the free food.

What KPIs should I track?

KPI stands for “Key Performance Indicator”; in other words, it’s a quantifiable measure used to evaluate the success of an organization, employee, etc., in meeting objectives for performance. When your business is offline, it is a bit more complicated to have a tracking system to follow up on these elements and therefore on your sales funnel or how your strategies are working. But you can always create your KPIs depending on your offline strategy. However, when you are an online business it is easier as there are tools such as Google Analytics that help you track your visitors and the pages they click, and allows you to set goals to track your customer’s journey all the way until they make a purchase.

Your KPIs could be visitors, subscribers, coupon usage, downloads, event attendees, and of course your sales. It all depends on your type of business and your strategy.

 

How to patch the holes in your sales funnel?

Manage and coach sales team –  As you could see from the example of the car event, your sales team plays a really big role in your customer journey. So maybe they need more preparation to talk to the customers or more knowledge about the product they’re selling. Make sure to train your sales team constantly so they develop different soft and hard skills for their job. If you take care of them, they will take care of your customers.

Create content that educates your prospective customers – It could happen that your prospects are aware of your product but they still don’t know they actually need it or how to use it. Your blog can be a great tool to give them information about the usage of your product and how it can help their problems.

A free booklet could also help. For example, if you’re selling cooking pans and utensils, you can create a free booklet with 5 recipes and how the products you’re selling can be used for the specific dishes. That way your prospects could figure out that with your pans the food won’t get stuck.

Pricing and promos – If you started your mailing list of people to show interest on your business, don’t make the mistake a lot of business owners make of leaving the prospects unattended for days, weeks, or months. You can start by sending them an email with a discount code right after they registered, or running a sale in your shop. This will get their interest and make them jump into the next stage.

Improve customer experience based on feedback – As mentioned before, after you get a new customer, start by asking them how was their experience, and what they think it can be improved from your service or product. Many brands send a survey after the customer’s purchase: this will help you know what’s going on in your customer’s mind, how you can provide a better service or product, and how to get them to recommend you and come back to you.

 

Conclusion

It all might seem overwhelming right now, but believe me: once you structure your sales funnel and map out the steps your prospects are taking to become your customers, you will be able to find the problems, fix them, and increase your sales. You don’t have to be a big corporation to implement such a system: you can do it from the start and it will make your life easier as you keep growing.

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