Today, you are going to learn about the legendary sales funnel—also known as the marketing funnel or the conversion funnel (these are kind of the same thing).

You will learn what the sales funnel is, why it’s important for the sales process, sales team, lead generation, and overall content marketing efforts, and I will also take you through all the steps you need to set up your own sales funnel from scratch.

Plus, I will talk about the pitfalls to avoid, as well as how it can really trip you up if you don’t get it right.

As you can see below, we have designed our own funnel and how it looks like from our perspective. You can download this below.

Let’s get started.

the sales funnel

On top of the Sales Funnel

Before you even start with the sales funnel stages, it is very important to go through some fundamental stages that will help you design the funnel and optimize it according to your business, and the type of potential customers you are targeting.

There are three main elements sitting on top of the sales funnel:

  • The customer avatar;
  • The traffic sources;
  • The return path;

Your Customer Avatar

The very top of the funnel is going to start with your customer avatar. There are a lot of different terms for it: target persona, customer avatar, sales avatar—they’re all really the same thing.

Your customer avatar is designed to represent the wants and needs of your customer base. You create a customer avatar for each segment of your customer base in order to better target all of your messaging. Some people do this very lightly, and others get really, really heavy into this—which is what I recommend as well.

The goal here is to create a successful customer avatar—you actually create a fictional person that represents certain interests, or wants, or needs of your target audience.

You give it a name, you give it a job, you give it a salary, you give it an interest, family life, relationship level. Whatever it is, you create that person and then all of your marketing messaging, targets that particular avatar, that particular type of person.

Basically, everything in your sales funnel flows from your customer avatar. It is very important to be thorough when creating it.

There’s a ton of different ways to do this, but what I love most is actually getting on the phone with your customers. Doing interviews and surveys will help you to actually figure out what the wants and needs are of your customers.

Traffic Sources

Once you have defined your customer avatar, it’s time to move on to the traffic sources – which are, basically, the channels you will use to pour users into your funnel—so, from a digital marketing perspective, there are a few of them:

  • Direct traffic: people typing in your domain name;
  • SEO: anyone coming from a search engine via organic search;
  • Paid traffic: ads that you buy on Google or Facebook, for example;
  • Social media traffic: people coming to your site from social media;
  • Referral traffic: people coming to your site from another site.

Traffic sources are independent channels, and they apply to each step of the funnel. We only briefly mention each of these—but each channel is large enough to be an entire specialization.

You could make an entire career, a team, or even a company out of each channel.

For example, I was an SEO specialist for a very long time as a career. I was part of an SEO team and there are certainly SEO companies out there. You could be an email marketing specialist, even part of an email marketing team, or you could join an email marketing company.

Return Paths

Within traffic sources, there’s also the return path. Put simply, these are the methods you use to draw customers back into the funnel once they have fallen out, so that you have a second chance at influencing their buying decision. These return paths act somewhat like a follow-up, but in a less direct manner: they remind website visitors that you have a great product/ discount/ free trial/ etc.

The two big ways that you can re-engage users and bring them back to your site are:

They can either drop users back in at the same stage of the funnel that they were at when they fell out of it, or start them over at the top of the funnel with a different type of content.

One of the most popular return paths is the abandoned cart checkout email.

Let’s say, for example, that you visit a website, you add a product to the cart, you’re about to check out and then the phone rings and you go away. Thirty minutes later, you get an email that says “Hey, you forgot to check out. Here are five dollars off. Make sure to check out before the day ends”.

That is an example of using an email as a return path to drop the user back into exactly where they were in the funnel previous to their abandonment, which is at the bottom of the funnel.

As an example of a return path that sends users back to the top of the funnel, let’s say, for example, that you add your email address to a list, you get a bunch of content about a particular topic, you don’t really respond to it and you stop opening it.

In this case, the website owner would give you a new piece of content or something entirely different to start you over on a different type of intent at the top of the funnel and then move you down from there.

Get the ClickMinded Conversion Funnel Toolkit

The Sales Funnel

Alright, we discussed the elements that sit at the top of the funnel—the customer avatar, the different traffic sources, and the return paths.

Now let’s move on to the actual funnel:

The Top of the Funnel

The top of the funnel is typically going to feature great content such as:

  • Blog posts;
  • Videos;
  • Podcasts.

It’s all about the mass market stuff—for example, in an old school company with old school marketing channels, this is your billboard on the highway, your Super Bowl commercial.

These pieces of content are designed to hit a very, very broad audience. What you are reading right now might as well be created for the top of the funnel.

The goals here are going to be things like:

  • Acquiring new traffic;
  • Segmenting your visitors based on their interests;

The metrics you might use to monitor these goals include:

  • Total number of new visitors;
  • Percentage of new visitors of your overall traffic;
  • New direct visitors;
  • The size of your retargeting list;

The Middle of the Funnel

The middle of the funnel will consist of tactics that are a little bit more targeted.

It may be something that’s colloquially called a lead magnet—giving users something in exchange for their contact details.

It may also be some type of opt-in, or maybe a low-priced offer (often called a tripwire, some type of $0-$19 product, a product that’s designed to give the user a ton of value in exchange for their trust, and commitment.)

The goals here are going to be something like:

  • The total number of returning visitors;
  • Leads generated;

And the metrics to use when measuring these goals include the following:

  • Total returning visitors;
  • Total number of new leads;
  • The growth of your retargeting list;
  • Total number of sales of your tripwire, and so on.

The basic idea here is that you have the user at the top of the funnel, you are warming them up to your product and who you are, you push them down in the middle of the funnel, and you want them to keep coming and engaging with you again, and again.

The Bottom of the Funnel

At the bottom of the funnel, there’s typically one thing going on—your core offer.

It doesn’t mean it’s just one product, it’s not your best selling product. It’s just the thing you do on your site, or the primary thing you want to achieve in your business.

The goals here are pretty obvious:

  • Maximizing conversions;
  • Increasing the conversion value.

The metrics that are a good proxy for this are:

  • Average order value;
  • Total number of revenue per visit;
  • Total number of SKUs that you’ve sold;
  • Total quantity of items that you’ve sold;

Retention

This is something a lot of people get wrong.

Converting users is very difficult—but it is very important to make sure that you make converted users more likely to buy from you again.

They have already made a purchase and loved the experience the first time—so it’s very common that a lot of people forget about retention and trying to give more value and monetize their users after the purchase.

Some examples of what you could do in the retention phase include:

  • A high-ticket event to an annual conference;
  • An ongoing consulting product if you are providing consultation services;
  • A monthly subscription;
  • A community you have built around the product;
  • Any other type of ongoing product customers get value from again, and again.

The goals here are to:

  • Get as many repeat buyers as possible;
  • Grow your total lifetime value for each customer;
  • Reducing refunds and churn.

The metrics that will help you map these goals are:

  • Percentage of users that you’ve retained with your product or application;
  • Total user lifetime value;
  • Net promoter score;

What Is Intertwined With the Funnel

We talked about the elements sitting on top of the funnel: customer avatar, traffic sources, and return path.

Then, we talked about the four stages of the funnel: top of the funnel, middle funnel, bottom funnel, and retention.

There are also two elements that are intertwined with every stage of the funnel: Measurement, tracking, and optimization.

You need to apply these to every stage of the funnel—and it never ends.

The best way to do this is through Google Analytics. Although it can feel very overwhelming at times, Analytics is all about focusing on what really matters.

I like picking a much smaller number of metrics to monitor throughout this whole process—it makes everything easier. Most businesses are able to focus on five metrics or less in order to see a real improvement. You really don’t need to monitor more than that.

You should be constantly experimenting and optimizing. You define your customer avatar, you have your traffic sources and your return paths. You have every step of the funnel. You have your Analytics and tracking.

From here on, you experiment and optimize—and you do this forever. This part doesn’t end.

Good funnel design and conversion rate optimization are the things you do to increase the percentage of users that move from one stage of the funnel to the next.

Keep in mind: this is not just for sales. It’s about increasing the overall efficiency of your entire funnel.

CRO (Conversion Rate Optimization) is not just about increasing the total number of people buying from you. It’s about increasing the total number of people that move through every stage of the funnel.

That’s it – this is the sales funnel, marketing funnel, or conversion funnel. This can be applied to the sales pipeline by all business owners, regardless of the business type they are running (be it a small business, a large eCommerce, or any other business, really).

Once you have done the following:

  • Created a great experience at the top of the funnel, in the middle funnel, at the bottom of the funnel, and in the retention phase;
  • Made sure your analytics and your optimizations are rolling;
  • Make sure you are constantly iterating and reiterating on the aforementioned,

… ladies and gentlemen, you have a loyal customer.

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