What Is A Sales Funnel?

Discover the funnel-building principles and strategies to grow any company online.

what is a sales funnel

You may have heard about the sales funnel when it comes to online marketing. Most people recommend having a funnel to increase leads, sales, and customer card value. So, what is a sales funnel? And how to get more efficiency from the sales funnel.

When you read our post, you may know a sales funnel in marketing and why it’s essential in your business. Today, I talk about the definition and share a checklist of how you can build it and a lot of resources you should know about the sales funnel.

Sales Funnel Definition

The sales funnel is a process that includes many stages. Each stage has one goal to help you convert your potential customers to buyers and increase cart value through up-sell or down-sell. So, you can increase revenue, enough budget for ad costs and give you the ability to pay more than your competitors to acquire customers.

A sales funnel is one of the main concepts of digital marketing. It always exists in your business, whether you know it or not.

  • e-Commerce
  • Local Business
  • Sales team
  • Website
  • Blogpost
  • Email
  • Personal consultation

In recent years, with rapid changes in economics and user behavior. Companies, businesses are racing to improve and optimize the customer experience in the online environment, which is attached to maximize the value per customer.

Once you know it well and optimize it, your business will be successful within a short period. It is helpful for small businesses and can make them become multi-million-dollar marketing machines.

Why is Sales Funnel Important?

People who visit your site are not equal. They have different knowledge, ideas, and goals. Most marketers have the biggest mistake of using the same sales message, offer, and funnel structure for all people, hoping it works effectively.

In fact, when prospects come with your brand, products, or services will go through the following processes:

Unaware => Problem Aware => Solution Aware => Product Aware => Most Aware

This is why your sales funnel has different stages that look like this!

online sales funnel stages

But it’s just a surfer of the iceberg. Your profitability does not come from the front-end funnel, so this is the reason why you should create the value ladder. Then, we have the whole picture.

Online Sales funnel strategy mapping
The whole picture describe the sales funnel and value ladder inside the marketing funnel
Because each step of the value ladder has different goals, you will use different funnels and scripts to achieve each step’s goal.

Understand The Sales Funnel Stages

There are so many sales funnel concepts and stages you can find on the internet. After all, they have 2 core sales funnel explanation

  1. Traditional sales funnel based on the AIDA model (AIDA sales funnel)
  2. Online sales funnel 

1. AIDA Sales Funnel

AIDA Sales Funnel

AIDA sales funnel has four stages:

  • Awareness: Let people know your business exists and have a solution that can help them solve problems
  • Interest: Connect with your audience; make them more interested in your products or services.
  • Desire: Prospect starting to find more detail about your company, products, or services. They compare you with others and consider buying or not.
  • Action: They take action on what you want, such as subscribe to your email list, buy your product, trial program you invited, etc.

AIDA sales funnel is available in every business, whether online or offline. It is difficult to see it clearly in offline marketing activities.

On the contrary, it is prevalent and easy to recognize online. Then I called it is Online Sales Funnel.

2. The Online Sales Funnel

The online sales funnel ( or digital marketing funnel ) was developed based on the AIDA sales funnel. It is visible as the landing page link with each other and follows the stage as an image below.

online sales funnel stages

A sales funnel similar to the best salesperson and guiding your potential customer through the entire sales process until they reach your desired destination.

There are so many online sales funnel types. But the process in a funnel is the same.

sales funnel process

We take someone to a page with only one goal: Get their name, email, and contact information. From there, we take those people who became leads in the sales process for selling products or services.

After they purchase, we will drive them to the One time offer (OTO page), then Upsell /down sell page to give customers more value also help you increase revenue online.

And the goal of Funnel Secrets is to help you understand how to build an online sales funnel.

The Benefits of Sales Funnel

In your opinion, what are the benefits of a sales funnel in online marketing? Why is it a trend and more and more people are applying it to their businesses?

According to marketing legend Dan S. Kennedy:

Whoever can spend the most money to acquire customer wins.

Dan S. Kenedy
Dan Kennedy quotes

Back many years ago, when the cost of advertising on Facebook and Google was low. For Example:

  • Product Price: $38
  • The cost for acquiring a customer is $10

=> Profit = $38 – $10 = $28.

Thus, with $0.38/click. If 100 people click and have one buyer, you’re break-even.

And what you need to do is optimize the conversion rate on the sales page

  • Title
  • Images
  • Video
  • Story 
  • CTA, … 

Whatever you can do, more than one in every 100 people who visit the site buys, you win.

Currently, the game has changed. Advertising costs are getting more and more expensive. For Google Ads, you may have to pay a few dollars or more for a click.

This makes beginners, small companies, or people who have a low budget unprofitable and bankrupt overnight. Watch the video below to see Russell Brunson (CEO & Co-founder of Clickfunnels) explained.

If you are a fan of Shark Tank, you will find that sharks always ask these two questions:

  1. What is your CPA? (How much does it cost to acquire a customer)
  2. What is your ACV? (How much is an average customer worth).
what is CPA and ACV

Here is where the sales funnel can help!

Remember when you go into Mc Donalds after you buy a hamburger. The staff will ask you: Would you like to have fries with that? Would you like to use a combo? Would you like to change to a large size?

I didn’t know the concept of sales funnels before; I used to call it Upsell

As soon as customers buy, you will introduce other products, and the profits will mainly come from these products. Returning to the problem above, if I add an upsell product for $ 97. Then you can spend at least $38 or more than that to get a customer. 

It’s the exact quote:

 “Whoever can spend the most money to acquire customers win.”

That’s how you grow your company, beat your competitors, sell more products, get your ads more seen out there. That’s how like all the things that you want in business, they come from that concept.

4 Types Of Sales Funnel

There are lots of different types of sales funnel that you can create. 

But depending on the goal that we want to achieve, I separate it into four types. Each type has multiple sales funnel, and they have a similar purpose, but they do it through different processes.

  • Lead Generation Funnel: This is a front-end funnel. The goal is to help you build a list, collect potential customer information, start nurturing leads and build relationships.
  • Buyer Funnel: The middle funnel helps you convince potential customers to buy your product and start making profits online.
  • High-ticket Funnel: The back-end funnel helps you sell higher-priced products and services. A high-ticket funnel is the best solution when your price is between 100 – $1000
  • Other Funnel: The funnel works well even if you use it to generate leads or sell products online. Also, funnels do not belong to any of the categories above.

Explore all types of funnels you could use in your business here

The 4 Simple Steps Of Funnel Building

1. Funnel Hacking – Research and analyze your competitors

This is a concept I have learned from Russell Brunson. Funnel Hacking is researching and analyzing competitors by going deep into their funnel to see what happens inside and why it’s working. (What do they offer? What about their hook, story, colors, page designs, etc.)

2. Create an Offer – Restructure what you are selling and turn it into an offer

Create an offer to help you increase the perceived value of what you sold and make it unique. So you could sell more.

3. Build your sales funnel

Create a landing page that you need inside the sales funnel, such as sales page, order page, upsell, downsell, membership area, etc. by using the tool I recommend in chapter 6

4. Testing & Optimize: 

The goal of building a sales funnel is to generate leads and make more sales online. So, always track the results, analyze and optimize them continuously until you make money.

I have already written the entire funnel-building process in my post called How to create a sales funnel. So you can click the link to read it.

Real-Life Example Of Sales Funnel

To help you visualize and understand the sales funnel better and how people are using it in online marketing, I will share three sales funnel examples below.

1. eCommerce Sale Funnel

Website: https://www.spreadshirt.com/

The spread shirt is a website that sells T-shirts. I like this website because I can design & customize my shirts and create designs to sell them in their marketplace. Let’s see how they increase the card value.

First is the sale page. Here, customers can pick the color of the shirt and customize the design if they want.

spreadshirt page - sales funnel for ecommerce
eCommerce Sales funnel: Sales Page

Because customers already like this, they will probably buy another product with the same design. If you are a couple, you could buy one more for your friend by clicking on the Men / Women button.

ecommerce sales funnel crossell page
ecommerce sales funnel: Crossell

And finally, “Customers also liked.” At this point, Spreadshirt will introduce more best-selling models to attract customers. 

The customer can view more popular designs and put them into their shopping carts.

Spreadshirt-upsell
Upselling

Look, with a simple tactic, there is an opportunity to sell more and promote other products. 90% of e-commerce sites use this method, so let do it now if you haven’t applied it to your business.

2. Book Funnel (Or Free & Shipping Funnel​)

Website: https://milliondollarads.com/

Million Dollar Ads book created by Peng Joon. Inside the book, he going to revealing to you the different framework for writing his best performing ads, and thought process behind each and every one of them so that you can model, swipe, and implement them immediately.

million-dollar-ads-peng-joon
Million Dollar Ads Book by Peng Joon

Before we go deep into, let me mapping the Million Dollar Ads funnel first to help you understand.

Million-Dollar-Ads-Funnel
Million Dollar Ads sales funnel mapping

The Free & Shipping funnel starts by promoting low-price products but high-value. This funnel has two advantages:

  • Free products can attract many potential customers.
  • Customers still have to pay for shipping.

Many people will complain that $14.95 for shipping is relatively high and unreasonable. Why not give away free 100%? Here is the reason:

  • You still need the money to pay for advertising, printing, and shipping. Therefore, in this case, the high rate is that you will lose money or break even (if you are lucky.)
  • We have a list of buying customers (high-quality leads)
Million-dollar-ads-sales-page
Sales page of the million dollar ads book

Next, to recoup costs, after customers fill in the information, a special offer will appear for $37. Some people will buy it, and it will help you offset the advertising costs. 

Besides, this is also why they can spend more than $20 to acquire a customer (pay more than competitors.)

million-dollar-ads-upgrade-order
First upsell of the funnel

The book gives you the best Facebook ads content formula and example. However, that is not enough for you to make money. Here, they will introduce you to the course “Million Dollar Ads Masterclass” for $297. 

Because customers have already bought from you once, chances are they will buy more.

Now, Peng Joon is starting to has profitable. Remember, the profit from the sales funnel doesn’t come from this book. It from upsell and the product he promotes later.

Million-dollar-ads-masterclass-and-bonus
Million dollar ads funnel #1 OTO page

After you know how to create an effective campaign, you already know how to market on Facebook, and you will encounter a new problem – SCALE.

When you start to make a profit, you feel excited. However, when you begin to scale ads, you lose money. You try:

  • Changing out image
  • Duplicating Ad set
  • Chatbot follow-ups
  • New Audience
  • Changing campaign Objectives
  • And more

and it’s still doesn’t work.

Right now, Peng Joon introduces you to the “Facebook Ads Secrets” course that will help you scale more effortlessly and more effectively. This course’s price is $ 347 – another opportunity to introduce other products and get more profits.

Million-Dollar-Ads-Fb-Secrets-masterclass

Finally, the thank you page. In this case, they will give you a link to create an account to login into the membership and receive the bonus.

Million-dollar-ads-thank-you-page
Million Dollar Ads Book Funnel: The Thank You Page

Inside the membership area, you will see two things:

  1. Bonus they promised
  2. Promote the upsell products again to increase conversion rates, get more profits, and increase customer value.
Million Dollar Ads Book funnel
Million Dollar Ads Book funnel: membership page

The Free & shipping funnel is a popular sales funnel used by many marketers and companies to grow their business online. (Russell Brunson, Dean Graziosi, Tony Robbins, Grant Cardone, etc.)

3. Webinar Funnel

Webinar Funnel is often used to promote products valued at $ 400- $ 1997. Here is an example.

Website: https://cfdesignschool.com/

Kathryn Jones creates the website; she is an expert in creating high-converting funnels and web pages without code, photoshop, or design skills. 

Before going deep into her funnel, let me show you the map first.

cf design school webinar funnel
CF Design School: Webinar Funnel

Steps in the funnel:

  1. Register Page: The registration page clearly explains your benefits when joining the webinar. 
  2. One-Time-Offer Page (OTO): They introduced a special offer for $37. This page helps them offset the cost of ads.
  3. Live Video: Teach what she promised and introduce special offers.
  4. Special Offer Page: She recaps what you will get and promote special offers. Also, the page has multiple payment options instead of a one-time payment – $997. It helps them increase conversion rates and is suitable for more people.
CF Design Funnel: Squeeze page
CF Design Funnel: Squeeze page (or webinar register page)

CF Design doesn’t list as many benefits as other sites. They only focus on three core elements. These are the problems and false beliefs that many people have and solutions.

  • Your website is ugly.
  • Spend more budget to design your website/funnel
  • How to use a “design facelift” to explode your sales, even if you suck at selling
CF Design Funnel the 3 secrets
CF Design Funnel the 3 core secrets

Next is the OTO page promoting “Design Hacker Tool Box” for $ 37. Some customers will buy this product here.

It helps Kathryn offset advertising costs to get people to attend the webinar, filter out high-quality leads list, and increase competitive advantage.

CF design webinar funnel

It would be best if you create a live webinar when you make the webinar funnel. In this case, you can see Kathryn using the video uploaded and played on Youtube.

This means she has done many videos before, then picks the best video which high conversion rates and sets it automated on the webinar funnel.

cf design school webinar live
CF Design School Funnel: Webinar page

The live training content will teach what is promised on the register page, and it is a step by step to introduce and direct people to the product. It was a special offer, high value, and priced at $ 997.

At the end of the video, she links to the sales page.

cf design shool sales page

To help increase conversion rates better, she came up with three option payment plans to help people quickly buy. Most people have a hard decision to buy a product for $ 997. Have multiple payment options:

  • Three payments of $ 397 
  • and seven payments of $ 197 

Will make it much easier for customers to make decisions. Of course, most people would expect their customers to pay one time for $ 997. However consider:

  • 3 payments of $ 397 = 3 * 397 = $ 1197
  • 7 payments of $ 197 = 7 * 197 = $ 1397

Not bad, right! Webinar Funnel is the best way to promote products from $400 – $1997, so if your business has similar products or services, let’s try it.

Want to see more examples of the sales funnel? Please read my Top 8 Best Sales Funnel Examples That You Want To Model here

Sales Funnel Softwares That You Need

Using the sales funnel software allows you to make your own without hiring a developer. Currently, on the market, many tools provide solutions to sales funnels (including all-in-one tools and partial).

Depending on the features, so the price is different. The list below is the most popular tools you should know:

Email Automation + CRM

Funnel Copy Generating Tools

Payment Gateways

[Bonus] Best Marketing Sales Funnel Resources

There are so many courses, videos, guides, tutorials you can find on the internet to help you create a high-converting sales funnel.

Now, do you understand what a sales funnel is?

I hope my post – What is a sales funnel? The guide for beginners could help you have an overview and essential steps to build a sales funnel online.

However, I know it’s not enough to help you succeed by sales funnel. There are thousands of resources about sales funnel on the internet that you can learn if you want – such as blogs, ebooks, Youtube videos, Courses, follow experts, forums, etc.

Of course, you have too many choices and learn many concepts, knowledge, and different strategic perspectives to confuse you.

Therefore, I have spent the final section sharing some valuable resources.

Sales Funnel Experts (Youtube Channel):

Sales Funnel Books (Free)

If you want to learn the best sales funnel course from a truly experienced expert to know precisely step-by-step how to build a sales funnel from scratch and get a reasonable price. Here is my recommendation!

ONE FUNNEL AWAY CHALLENGE

Launch your first (or next) funnel…
in just 30 days

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Key Nguyen

Key is the guy behind Funnel Secrets blog, where he shares his passion for sales funnel, lead generation, digital marketing, and what he learned to help people avoid mistakes he made to save money.

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